|Northwest European benzene’s premium over naphtha is coming off the 16-week high hit in the center of last week regardless of a bearish naphtha fad, as a result of the threat of slowing down downstream need and also a weakening US market, according to resources.
Benzene’s premium over naphtha, a measure of benzene manufacturing margins, was analyzed at $520.25/ mt Tuesday, down by $43.25/ mt from last Wednesday when it reached $563.50/ mt, the highest level since early April.
Commonly a spread of $250/mt is taken into consideration enough to break even.
Margins have come under pressure in spite of a stable decrease in the cost of feedstock naphtha, which has dropped by 5.7% from the current height in mid-June. Place naphtha was last analyzed at $919.25/ mt CIF ARA Tuesday, the most affordable considering that early April.
Naphtha costs in Europe are on the slide right now, as discounted LPG is swiping downstream demand from naphtha as well as a weak overview for need from Asia restricts export electrical outlets.
Benzene in Europe is likewise under stress, nonetheless, as traditionally high costs have actually contributed to the damage of downstream need.
Benzene customers feel that they would be incapable to hand down a possible rise in feedstock costs to their consumers, particularly against the background of a seasonal dip in August.
The place benzene price was analyzed at $1,439.50/ mt CIF ARA Tuesday, down $25.50/ mt day on day. Throughout the week the benzene place cost has actually shed 3.9% emphasis moved from short-covering to following month’s agreement cost settlements.
The July CP was agreed at $1,466/ mt CIF ARA, which is $26.50/ mt above present place prices.
At https://www.irobiocide.com , US benzene prices fell to 502 cents/gallon ($1,501/ mt) FOB USG by Tuesday’s close, down by 39.95 cents week on week ahead of the arrival of imports and also as all shorts currently seem covered.
Thus the arbitrage from Europe is open theoretically, however few are most likely to want to function it because of a steep backwardation in the US.
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