The spread between December Northwest European naphtha and benzene has dropped to $150/mt as length in benzene has meant that strong crude-inspired gains in naphtha have not been passed through to benzene prices.
Platts data shows that the assessed naphtha-benzene spread December 2 was $150/mt. This appeared little changed Friday morning as despite ICE January Brent climbing above $91/barrel, December benzene was seen stable at a bid/offer range of $985-995/mt for 1,000 metric tonne CIF ARA barges.
European open-spec naphtha was seen holding at a 26-month-high of around the $840/mt CIF NWE for prompt cash barges, maintaining the current spread.
This is the lowest naphtha-benzene spread of the year to date, and highlights the softening of benzene prices over quarter four and the second half of 2010.
Platts data shows that the average naphtha-benzene spread for November was $180.60/mt compared to $211.52/mt in October. The average spread for the for first half of 2010 was $324.44/mt.
Some sources have cited the comparatively low spread as a potential reason for a climb in the NWE price. One trader said length in December was stopping benzene prices rising further and widening the spread, however.
"It seems there is a little bit of length that needs to be taken care of before we can go through the $1,000/mt level for December," the trader said.
A second trader added: "If you look at the spread it's small and in theory it could give some upwards potential. But supply is good and benzene is not tight in Europe, or anywhere else, so it's hard to see that it can go up at the moment."
Platts data shows that the assessed naphtha-benzene spread December 2 was $150/mt. This appeared little changed Friday morning as despite ICE January Brent climbing above $91/barrel, December benzene was seen stable at a bid/offer range of $985-995/mt for 1,000 metric tonne CIF ARA barges.
European open-spec naphtha was seen holding at a 26-month-high of around the $840/mt CIF NWE for prompt cash barges, maintaining the current spread.
This is the lowest naphtha-benzene spread of the year to date, and highlights the softening of benzene prices over quarter four and the second half of 2010.
Platts data shows that the average naphtha-benzene spread for November was $180.60/mt compared to $211.52/mt in October. The average spread for the for first half of 2010 was $324.44/mt.
Some sources have cited the comparatively low spread as a potential reason for a climb in the NWE price. One trader said length in December was stopping benzene prices rising further and widening the spread, however.
"It seems there is a little bit of length that needs to be taken care of before we can go through the $1,000/mt level for December," the trader said.
A second trader added: "If you look at the spread it's small and in theory it could give some upwards potential. But supply is good and benzene is not tight in Europe, or anywhere else, so it's hard to see that it can go up at the moment."
