Downstream demand from styrene monomer production and a wide styrene/benzene spread supported local benzene demand in Europe, with Northwest European benzene spot barges for delivery 5-30 days forward assessed at $615/mt CIF ARA Wednesday, up $15/mt on the day.
This put benzene spot prices at a premium of $39/mt, or 6.8%, to the March Monthly Contract Price of $576/mt (EUR523/mt) Wednesday. Throughout February, European benzene spot prices averaged $590/mt. This represented an average discount of $11.50/mt, or 1.9%, to the February MCP of $601.50/mt (Eur551.50/mt).
“Seems like there may be some tightness in the [benzene] market…I think styrene may be a big driving factor,” a Europe-based trader said Wednesday.
Around half of Europe’s benzene output is used to produce styrene monomer, a chemical intermediate for making styrenics products such as polystyrene, acrylonitrile-butadiene-styrene and styrene-butadiene-rubber.
According to industry sources, European styrene monomer production plants were running at high rates ahead of scheduled turnarounds in Europe in the upcoming weeks, which — according to Platts data — could amount to a total reduction in styrene production of 99,863 mt.
Moreover, downstream demand for benzene was supported by a wide styrene/benzene spread both in terms of spot and contract prices.
The March contract price styrene/benzene spread — the difference between the FOB ARA styrene March MCP and the CIF ARA benzene March MCP — was at $543.82/mt (EUR502/mt) Wednesday, up $139.20/mt (EUR128.50/mt) from the February contract price spread.
The contract styrene/benzene spread widened after the benzene and styrene March MCP settlements earlier this week. The styrene March MCP settled at EUR1,025/mt ($1,110.38), up EUR100/mt from February’s value, while the benzene March MCP settled $25.50/mt (EUR28.50/mt) lower than the midpoint of the February contract prices of $601.50/mt, or Eur551.50/mt.
Meanwhile, despite narrowing $15/mt on the day, the spot styrene/benzene spread — the difference between the FOB ARA styrene spot price and the CIF ARA spot benzene price — was still relatively wide at $400/mt Wednesday. On average the spot styrene/benzene spread was at $321.10/mt in February, Platts data showed.
Downstream support for the European benzene complex remained visible during the Thursday morning session London time, with bid-offer ranges for spot benzene CIF ARA heard higher at a $620-$625/mt bid range and $650/mt offer for March delivery.
