Asian benzene fell $4/mt day on day to $639/mt FOB Korea November 12 on weaker upstream crude prices.
ICE December Brent futures fell $1.39/b over the same period at $45.81/b at 4:30 pm Singapore time (0830 GMT), close of Asian trade November 12.
Sentiment weakened further November 12 as crude prices tumbled, resulting in thin trade activities for the FOB Korea marker.
Most market participants moved with extreme caution in spite of positive spreads for the East-West arbitrage.
Analysis continues below...
The FOB US Gulf January price moved down 2 cents/gallon to 237 cents/gal November 11, or $708.63/mt.
The spread between the November 11 FOB US Gulf assessment and the latest FOB Korea marker was $69.63/mt November 12.
The arbitrage window from South Korea to the US Gulf Coast remained open on paper for a 10,000-mt cargo with prevailing freight costs at $58-$63/mt.
Sellers were heard allocating most of their December-loading cargoes to buyers in the US Gulf Coast in response to the open arbitrage window.
Movements were slow in the aromatics complex November 12, with downstream styrene monomer flat day on day at $910.50/mt FOB Korea and $933.50/mt CFR China November 12, while upstream toluene fell $9/mt over the same period to $646/mt FOB Korea.
Rationale: FOB Korea benzene was assessed at $639/mt November 12, down $4/mt from November 11.
The marker takes the average of the third and fourth half-month forward laycans, currently H1 December and H2 December.
Offscreen before the Platts Market on Close assessment process, the best bid for H2 December was $634/mt, against an offer heard at $643/mt.
Both December laycans were assessed between the bid and offer at $639/mt.
During the MOC process, the offscreen offer for H2 December/January timespread was at minus $10/mt, with no bids heard.
The H2 December/January timespread was assessed below the offer at minus $11/mt.
Both January laycans were assessed at $650/mt based on the H2 December/January timespread assessment of minus $11/mt.
Latin benzene pricing rose $31/mt week on week, assessed November 6 at $622-$624/mt FOB Brazil, tracking US Gulf Coast pricing.
Benzene prices in the US -- a destination of choice for South American producers with export material -- rose on limited supply amid stronger demand, sources said.
NYMEX December crude settled 91 cents lower at $44.29/b while ICE December settled down 56 cents at $47.42/b amid a strong US dollar and the prospect of a Federal Reserve interest rate hike in December.
Prompt-month Northwest European benzene was assessed November 6 at $655.50/mt CIF ARA, up $13/mt on the week.
In production, Braskem's aromatics and olefins production at its ABC complex in Sao Paulo remained shut, a company spokeswoman said.
The shutdown included a 255,000 mt/year benzene unit, Braskem's third-largest in Brazil. Braskem has not given a time frame for resuming production.
In trade activity, a 5,000-mt benzene cargo left the port of Salvador in Brazil and was seen heading to the port of Campana in Argentina with an arrival due early this week, according to Platts cFlow ship-tracking software.
Rationale: Latin benzene was assessed $31/mt higher week on week to $622-$624/mt FOB Brazil, tracking US Gulf Coast markers.
The assessment was calculated by applying prompt-month and forward-month US Gulf Coast assessments on a 3-to-30-day netback formula that accounted for freight costs at $60/mt.
The FOB USG prompt-month assessment was at 228 cents/gal and forward-month assessment at 230 cents/gal.
The Northwest European benzene market shrugged off a drop in crude oil prices, with the spot value edging up $5.50 to $675.50/mt CIF ARA November 11.
Crude oil prices fell, with front-month ICE Brent futures sinking $1.36 to $46.05/b.
Sources said that the market, however, was nowadays driven by developments in other regions, and in Asia and the US prices both were marginally higher on the day.
Sources said that the November 10 buying interest was largely triggered by the logistical issues on the Rhine, with the buyer trying to make up for the volumes which could not be shipped due to still low water levels.
Apart from regional imbalances caused by the Rhine, source said that the European benzene market was well balanced at the moment.
Production margins continued to be favorable, with one trader saying: "The benzene-naphtha spread is not bad. It is of course not $400-$500/mt, but producers are making money. They are in a comfort zone."
The benzene-naphtha spread has broken above $250/mt during the week ending November 13.
Rationale: Platts assessed benzene loading 5-30 days forward at $675.50/mt CIF ARA, up $5.50. No deals were reported done.
The last November bid-ask range was heard at $670-$680/mt. Platts assessed November at $675/mt, $5 above the bid.
December was assessed at $677/mt, within the outstanding bid-offer range of $675-$680/mt.
January was heard discussed at $690-$705/mt. Platts assessed at $695/mt, $5 above the outstanding bid.
The rest of the curve moved in line with the January assessment, with prices for first quarter 2016 averaging $703.33/mt, within the bid-ask range of $700-$710/mt. CIF and FOB parcels remained assessed at parity.
US spot benzene pricing for November gained 10 cents from a week ago, assessed November 6 at 228 cents/gal FOB USG and 226 cents/gal DDP USG.
December assessments rose 9 cents on an FOB basis to 230 cents/gal and 8 cents on a DDP basis to 227 cents/gal November 6.
Some participants were covering short positions as supply was limited, sources said.
Some participants were bullish as Asia benzene shipments were around 50,000-70,000 tons in October.
NYMEX December crude settled $2.30/b lower week on week at $44.29/b, while the ICE Brent marker settled $2.14 lower over the same period to $47.42/b.
The benzene-to-crude ratio for WTI stood at 2.16 and at 2.02 for Brent. The benzene-to-RBOB spread was at 91.05 cents/gal as RBOB was slightly lower at 136.95 cents/gal.
The FOB Korea-US arbitrage was open on paper November 6, with the spread between the two regions around $62/mt, based on the FOB Korea price at $626/mt and US December pricing around $688/mt FOB USG.
The Europe-US arbitrage remained closed, with the spread at $32/mt, based on November pricing at $656/mt FOB Rotterdam.
The US-Europe arbitrage was also closed, with the spread at minus $22/mt, based on December pricing at $660/mt CIF ARA and US November pricing at $682/mt.
In derivative markets, spot styrene was up 0.50 cent week on week to 38.50 cents/lb FOB USG.
In phenol, the spot export assessment was stable week on week at $794-$816/mt (36-37 cents/lb) FOB USG November 3, while the domestic phenol assessment gained $17/mt to $904-$926/mt (41-42 cents/lb) FOB USG ex-tank.
Rationale: Platts assessed November FOB at 228 cents/gal based on the November 5 2-cent premium to November DDP, which was assessed at 226 cents/gal, based on a range at 224-228 cents/gal.
December FOB was assessed at 230 cents/gal based on the November 5 3-cent premium to December DDP, which was priced at 227 cents/gal based on a range at 226-229 cents/gal.
Toluene commentary: Asian toluene falls on bearish sentiment; US spot higher despite weaker energy