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Americas: Platts US Morning Market Analysis: Prices lower as crude falls

https://www.chemnet.com   Mar 09,2011 Platts
Petrochemical prices fell overnight in Asia as crude and naphtha feedstock prices settled lower. April Brent futures shed $2.86/barrel to $114.12/b at 0830 GMT in Asia, against $116.98/b at the corresponding time on Monday. The CFR Japan benchmark for naphtha dived $25.01/mt to $988.38/mt. The Asian benzene price plunged $30.50/mt, wiping out a $7 gain Monday, to settle at $1,157/mt FOB Korea, a three-week low.

As benzene price falls were steeper than naphtha's, the benzene-naphtha price spread shrank to $168.62/mt from $174.12/mt on Monday. An end-user said the arbitrage between Asia and the US/Europe had closed, resulting in a glut in Asia. The European benzene price fell Monday to $1,345/mt CIF ARA. This morning in Europe, April benzene was heard traded at $1,295/mt CIF ARA. The US price was stable Monday at $1,267.76/mt FOB USG.

The Asian toluene price also fell sharply overnight, settling $18.50 lower at $1,032/mt FOB Korea. High inventories in Asia were putting downward pressure on prices. The inventory level in East China remains at a seven-month high of 150,000 mt because of weak downstream demand. The last time stocks were near this level was on July 25 of last year. The US toluene price was assessed at $1,079/mt on Monday. The European toluene price fell on Monday to $1,070/mt FOB Rdam.

The falling naphtha price in Asia also caused isomer-grade mixed xylene prices to fall overnight. The FOB Korea assessment fell $3 to $1,087.50/mt. The US mixed xylene price settled Monday flat at $1,099/mt FOB USG.

Margins for aromatic production continued to fall in the US on Monday as both benzene and paraxylene settled lower. The margin for toluene hydrodealkylation was more than $7 below break even. Toluene disproportionation fell to $69/mt. MSTDP fell to $349/mt.

Asian styrene monomer tumbled Tuesday by $26/mt to $1,415/mt FOB Korea as upstream prices fell and Chinese import demand remained low. Liquidity had been curbed in the domestic market due to the moves by the Chinese government to slow inflation, and this was the main factor affecting the market at the moment, a Chinese trader said. A high inventory level, estimated around 140,000-160,000 mt in East China this week, had made it difficult to find tank space, forcing some traders to ship cargoes out of China to markets like Taiwan and Southeast Asia. The recent sharp drop in the Asian styrene price has caused the delta between the US and Asian price to climb to nearly $140/mt. The US price was assessed at $1,554/mt on Monday. The European styrene price fell to $1,525/mt FOB Rdam.

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