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Global December benzene contracts settle higher; US split again

HOUSTON, December 1, 2016 (PCW) – Global December benzene contract prices were higher as spot prices rose on tighter supplies and Brent crude climbed amid expectations of production cuts.

The US December benzene contract price settled at 234 cpg ($700/mt) and 235 cpg ($703/mt), up 11-15 cpg from the Nov split settlement of 220 cpg ($658/mt) and 223 cpg ($667/mt).

Meanwhile, the European December benzene contract price settled at €631/mt ($668/mt or 223 cpg) CIF NWE, up €28/mt from November. In Asia, Japan’s JX Nippon Oil & Energy settled the Dec Asia Contract Price at $785/mt (263 cpg) CFR Asia, up $135/mt from the Nov settle. 

The upticks are in line with increases in the spot markets and Brent crude.

 Spot Asian prices rose $97/mt, or 15%, in November, while European benzene picked up $47/mt, or nearly 13%. US prices were up 20 cpg ($60/mt), or 9%.  

The increases come amid a heavy turnaround season in the US, continued maintenance work in Asia and the resulting drop in exports. Inventory levels in China remain low due to the maintenance that has been ongoing since 3Q and Sinopec has continued to call for hefty price increases in its domestic benzene list price, which has had a knock-on effect in Asian markets.

Adding to the bullish pressure is seasonal heavy buying from Chinese producers ahead of the Lunar New Year holiday. The planned shutdown of KPPC’s Shuaiba petrochemicals facility in November has led to an uptick in exports from Europe, which has strongly supported prices in that region. -- Samantha Hartke

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