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Asian Benzene - Prices dip over glut, low liquidity- 09Jul,2010

https://www.chemnet.com   Jul 12,2010
Prices dipped slightly Friday amid concerns of an oversupply in naphtha in
Asia. The demand-pull is not there, a market participant said, as both price
and quantity are weakening. Benzene spot activity in Asia was lackluster
Friday morning in spite of firmer overnight benzene and crude prices in the
US. "It shows how bad the benzene market is," the participant said. "If we
buy US benzene at $798/mt, or 266 cents/gallon, how can the market in Asia
buy at $780-$790/mt FOB Korea?" Bids and offers for any September-loading
cargoes were at $785/mt and $793/mt FOB Korea, respectively, similar to
Thursday's levels. During the Platts Market on Close assessment process,
Shell's bid of $790/mt for a September parcel was not taken out. Asian
benzene prices were assessed at $784.50/mt, down $2/mt from Thursday. Market
sentiment was bearish on oversupply of benzene and closed arbitrage windows to both the US and Europe. Aromatics producers in Asia are refusing to cut
runs as margins are still there, while demand is weakening and inventory is
high, a market participant said. "This is a terrible market." It is not a
question of price, it is a matter of finding outlets. Taiwan's Formosa
Petrochemical shut its No. 1 cracker after a fire Wednesday afternoon.
However, the effect of the news was muted as Formosa's aromatics plants
were not affected. In turnaround news, Idemitsu Kosan plans to shut its
aromatics plant in Tokuyama on September 1 for 30 days. The plant makes
274,000 mt/year of benzene. In South Korea, Hyundai Oilbank is mulling cuts
to its production in view of weak market demand and poor margins. The
company's unit in Daesan is able to produce 110,000 mt of benzene. LG
International plans to sell a 9% stake in Aromatics Oman LLC by July 30,
reducing its current stake of 10%. AOL operates a plant in Sohar, which can
make 210,000 mt/year of benzene. In Thailand, PTT Aromatics and Refining
resumed operations at its No. 2 petrochemical complex on Friday last week.
About 20,000 mt of benzene will ship to the US in July from Thailand.
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