Benzene prices drop

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Thursday, September 20, 2012
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9 p7 ~( e- k! u) EHouston, TX - The Plaza Group’s August benzene report shows U.S. Gulf Contract price for September settled at $4.20 per gallon, a drop of $0.40 per gallon from August. Extended consumer shutdowns due to unacceptable margins have affected the market. Hurricane Isaac caused one cumene producer to shutdown, but most benzene producers were not affected. Styrene margins have somewhat improved but the ability to get production back quickly has impacted the supply demand for benzene. Furthermore, lower benzene pricing are being offset by rising ethylene prices, the report said. Improved Asian phenol prices, combined with lower benzene prices may open phenol markets for export. Even so, the improved net backs on phenol would need to be supported with acetone margins to become viable. There may be some cumene demand improvement, but it is too early to say. The ratio of benzene to crude is slightly below 2.0 and as such there will be some pressure on benzene pricing going forward but no major movements are expected.