Benzene prices jump above $2/lb
Crude oil price increases are having an impact
Tom Stundza -- Purchasing, 6/24/2009 12:47:28 PM
Benzene spot-market prices averaged more than $2/gallon in June for the first time in eight months and looks to stay above last month's $2.24 in July. Just where its settles, though, is unclear since early sales for July deliveries already have slipped from $2.72 to $2.64.
The market sentiment is prices of benzene will remain strong this summer because of solid export demand. That's because the global aromatics hydrocarbon industry is expanding despite the global economic slowdown. So, market insiders tell ICISpricing.com that better-than-expected late-June demand from foreign buyers has boosted export sales and pricing activity. In Europe, for example, July deliveries will cost buyers $3.75/gallon.
That is leading to speculation of higher domestic benzene pricing in July, as well, even though North American demand for commodity chemicals remains erratic.
Also, since benzene is synthesized from crude oil, there is general expectation that benzene will take some upward direction from crude oil trading on the New York Mercantile Exchange (Nymex)--where futures are averaging $69/barrel for the third quarter, as compared with $58 in the second quarter. "Crude is following the dollar," Jonathan Kornafel, Asia director for market-maker Hudson Capital Energy in Singapore tells the Associated Press. "Right now, crude is largely being bought as an inflation hedge."
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