Houston — US December benzene contracts were heard settled sharply lower Monday, falling 69 cents on the month to settle at 211 cents/gal.
The decline was in line with market expectations as participants had pointed to a sizeable gap between the contract price and spot values.
Prompt spot benzene prices on a DDP USG basis fell 45 cents over the course of November and finished the month assessed at 203 cents/gal.
Sources continued to talk of market length on strong imports in September and October and as toluene conversion units had run hard to capitalize on strong margins.
Additionally derivative demand from the styrene segment had been softer in September and November. Spot benzene prices also saw pressure from lower crude values as WTI futures shed $12.79 over the course of November, finishing the month at $50.93/barrel.
While fundamentals were not expected to shift significantly headed into 2019, they could tighten somewhat in January, a source told Platts.
Supply-side conditions could be impacted by lower import volumes as well as a possible uptick in buy interest in January associated with restocking.
Additionally, output was expected to be reduced from toluene conversion units as margins are crimped by the lower benzene contract as well as a likely decline in the paraxylene contract. Seasonal refinery maintenance could also play a role, the source said.
–Kevin Allen, email@example.com
–Edited by Alisdair Bowles, firstname.lastname@example.org
Source: S&P Global Platts