Benzene premium to naphtha at nine-month high on Shell Moerdijk outage
London (Platts)--8Oct2014/744 am EDT/1144 GMT
Benzene's premium to naphtha has hit a nine-month high in the wake of last week's outage at Shell's aromatics complex at Moerdijk in the Netherlands which has boosted the price of benzene, market sources said.
Meanwhile, feedstock naphtha has moved lower in unison with crude.
Benzene spot prices were assessed at $1,356/mt CIF ARA Tuesday, up $77/mt since Friday on news of a steam leakage at Moerdijk. Benzene's premium to naphtha -- a proxy for assessing benzene production margins -- hit a nine-month high of $594.75/mt, more than twice the required breakeven level.
The divergence between benzene and naphtha spot prices in Europe is being exacerbated by weakening energy prices and a lack of demand. Naphtha was assessed at $761.25/mt CIF NWE Tuesday, down 6% week on week.
The European naphtha market has weakened under pressure from prompt physical length, a resilient lack of demand, a difficult arbitrage to Asia, and falling crude prices, trading sources said.
"There is a huge length of open spec," a trader said. "There is a lot of supply and no demand...petchems are not running hard and buying LPG as much as they can, and blending demand is only for specific grades."
Recent movements in benzene and naphtha have put benzene's premium 22% above the $485/mt average seen so far this year, according to Platts data.
http://www.platts.com/latest-news/petrochemicals/london/benzene-premium-to-naphtha-at-nine-month-high-26898666
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