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Europe: Market fails to follow initial August benzene contract settlement

https://www.chemnet.com   Aug 03,2010
Negotiations for the August European monthly benzene contract price
settlement continued over from the last days of July and into August on
Monday, when a large proportion of the market failed to reach a conclusion.


An initial contract price settlement was agreed late Friday at Eur 668/mt
or $873/mt, reflecting a Eur12/mt drop on a euro basis versus Eur680/mt in
July but a $43/mt rise on a dollar basis versus July's $830/mt, a source
at LyondellBasell confirmed.


However, by midday Monday, all market sources contacted were yet to
confirm having followed the settled level with a targeted price of $870/mt
part of the bid offer range being discussed.


"It is still unclear what the number will be, or even if there might be
two contract numbers," one European buyer said.


"I understand the range is $870-873/mt, some people really don't want to
move from their position and I'm not sure there is 100% consensus at that
($873/mt) price," a supplier commented.


The higher initially settled price of $873/mt was said to have been
justified by "the impact of Dow's problems at Terneuzen, which are clearly
visible in a well supplied market. It is expected that Dow will come back
online by the 10th but if not it will be interesting," a trading source said
Monday.


Benzene production at Dow Chemical's aromatics unit in Terneuzen in the
Netherlands was shut down due to a production issue at the site, a
company spokesman said on Friday.


"We were experiencing difficulties at our aromatics unit in Terneuzen. As
a result, benzene production will be shut down in Terneuzen for an estimated
period of three weeks," the source said.
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