Low crude price shatters benzene markets

October 23, 2008 - Global

The consequence of global financial meltdown is apparent in almost every aspect of life. Effects will be such, experts are anticipating that demand for energy will slow down and price will plunge up to US $50 per barrel. Thus prices of downstream products will also go down.

This is quite evident from the fact that Asian benzene markets fell US $100 per ton on Wednesday, FOB Korea closed at $496.50-$497.50 per ton, FOB Southeast Asia closed at $480.00-$481.00 per ton, benchmark price of October pure benzene in South Korea narrowed 51 percent to touch $526 per ton.

Few of the manufacturers are finding it difficult to cope with the situation; they are not able to cut back their production, as they have to fulfill supply contracts.

Since the starting of third quarter, Japanese oil companies have already started maintaining their operation rates at many of the benzene plants at 80 percent; HAD plant of Sanyo Petrochemical at Chiba with output capacity of 300,000 tons per year maintains an operation rate at 80 -85 percent.

Today’s ex-factory benzene price from Sinopec Guangzhou Branch is implemented at 5500 yuan per ton, including Maoming Petrochemical, Changling Refinery and Wuhan Petrochemical.

As a result of weak demand, the ex-factory settlement price from Sinopec Beijing branch for October stood at 5500 yuan per ton.

Implementation price from Zhenhai Refining and Chemical, Jinling Petrochemical, Shanghai Petrochemical under Sinopec Shanghai Branch is quoted at 5500 yuan per ton.

Ex-factory benzene price of Sinopec for Northeast area is adjusted to 5350 yuan per ton, including Jilin Petrochemical and Daqing Petrochemical, currently some plants facing stock pressures.

Benzene plant of Qingdao Great Refinery has been operating normally; its price follows the uniform level from Sinopec Beijing branch at 5500 yuan per ton.

China's total benzene production registered 336,000 tons in September 2008, compared to 327,000 tons in the same period last year, a year-on-year increase of 2.5 percent.

Up to September this year, cumulative production of the region amounted to 3.11 million tons, an increase of 2.3 percent from the total production of 3.04 million tons over the same period last year.

For world market prices click here