Aromatic Chemicals Prices Erupt27 Jan 2010 • by Natalie Aster
Spot prices across the aromatics chain of chemicals are up this month due to tight supply of prompt-delivery materials. Reason: Reduced output at crackers by producers using this wintertime period of weak domestic demand to perform needed maintenance.
Market sources report that January spot supply of aromatics is exhausted, and February availability is limited. That's why benzene jumped to $3.45/gallon this month from $2.85 in December. Phenol increased 11?/lb to 61?, styrene increased 7?/lb to 55?, toluene erupted by 43?/lb to $2.86 and mixed xylenes jumped to $2.91/lb from $2.53 in December.
Downstream inventories will need to be rebuilt, suggest IHS Global Insight economists, when underlying end-market activity gradually recovers. And that will push market prices even higher in the first half, says Global Insights analyst Frantz Price; in fact, he expects overall petrochemical prices to increase by 10% or more in 2010.
In the meantime, ICISpricing.com reports that "snug benzene supply in the U.S. has prompted Asian sellers to move cargoes across the Pacific.'" However, the estimated 25,000 metric tons leaving Asian shores in late January and another 45,000 metric tons heading eastward in February won't arrive for some weeks-probably in March.
Asian aromatics are plentiful because production plants have been running at full tilt even though demand slowdowns are imminent when the Lunar New Year holidays start being observed in early February in China, Taiwan, Japan and South Korea.
More reports available on the product: