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NGLs Week is PetroChem Wire's comprehensive summary of price trends, upstream and downstream costs, operations news and supply/demand forecasts. The report contains everything you'll need to understand what's happening in the NGL markets.

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Global October benzene contract prices settle lower

HOUSTON, Oct 4, 2016 (PCW) – Global October benzene contract prices were lower on softer spot prices and increasing length in the market.

In the US, the October benzene contract price settled at 231 cpg ($691/mt), down 14-20 cpg from the split Sep settlement of 245 cpg ($733/mt) and 251 cpp ($750/mt).

In Asia, Japan’s JX Nippon Oil & Energy settled its Oct Asia Contract Price (ACP) at $630/mt (211 cpg) CFR Asia, down $35/mt from the Sep ACP.

Meanwhile, the European Oct contract price settled last week at €598/mt ($670/mt or 224 cpg), down $29/mt from the September CP.

The lower contract prices are reflective of softer spot prices across the board. Asia front-month values gave up about $46/mt in Sep, while Europe shed $26. US spot benzene fell about 18 cpg ($54/mt). Benzene is reacting to increasing length in the market, rather than the movements of Brent crude, which rose about $3.60/bbl during the same time frame.

Heavy downstream maintenance in Asia have led to higher inventory levels, especially in eastern China, which have dampened prices in the region. Higher availability of benzene cargoes out of Asia because of this has also led to an influx of exports expected to hit both US and European shores in October. European markets also received a fair amount of imports from the Middle East in Sep, which is likely to continue in Oct, even as some unexpected downstream outages have lowered benzene demand in the region.

The US’ contract price saw the largest month-on-month decline largely because for much September, it was the highest priced spot market, which opened the Asia-US arb and ultimately attracted several cargoes that are expected to dock in Gulf Coast ports this month. Additionally, domestic on-purpose production was reportedly reduced due to severe weather and several refinery and petrochemical plant outages, leading to lower domestic supply. -- Samantha Hartke

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