LONDON, December 18, 2014 /PRNewswire/ --
(ICIS)--European benzene December and January spot prices spiked 15-18% on Thursday morning amid a flurry of overnight deals.
Several January deals were reported by buyers at $700-725/tonne CIF (cost, insurance and freight) ARA (Amsterdam, Antwerp, Rotterdam), while a December deal was reported at $690/tonne CIF ARA.
Offers continued to firm in the morning session with December rising to $690-740/tonne CIF ARA, and January at $700-740/tonne CIF ARA.
At 17:00 GMT yesterday, benzene December was trading at $600-630/tonne CIF ARA and January was at $600-620/tonne CIF ARA. This represents a 17-19% rise.
The increase was driven by rising crude oil prices, talk of production problems at a major European producer - although this could not be immediately confirmed - and US benzene markets opening firmer.
"I think crude could be a reason, US opened stronger, some rumours of production problems. People thought it could be the turnaround," a buyer said.
As a result, a flurry of industry buying activity took place, creating a spike in prices. Nevertheless, spot prices still remain well below the December contract price, which was $960/tonne FOB (free on board) NWE (northwest Europe).
Bids and offers for December edged back down to $675-710/tonne CIF ARA by Thursday afternoon, while January remained in contango at $690-725/tonne CIF ARA. Despite an initial upturn earlier in the day amid talk of a production issue at one major European supplier, the overall outlook for the coming weeks into January 2015 remains bearish, although there is a sense that the market may have reached a floor in the low $700s/tonne.
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