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European Benzene Prices Pulled up by the Increased Production Cost
European Benzene Prices Pulled up by the Increased Production Cost

European Benzene Prices Pulled up by the Increased Production Cost

  • 15-Mar-2024 5:23 PM
  • Journalist: Patrick Knight

Hamburg (Germany): Benzene prices in the European market remained unchanged from the previous week following a series of significant increases. The previous weeks saw a sharp rise in prices due to increased demand from industries using styrene, phenol, and other solvents, as well as rising production costs domestically. The surge in demand for aromatics and styrene affected Benzene prices, with manufacturers having to maintain higher prices to balance supply and demand and cover production costs. The price quotations of Benzene in the European market were observed at USD 1,230 per MT, FOB Hamburg, for the week ending March 8th, 2024.

The Manufacturing PMI increased slightly to 42.5 in February 2024 from the initial estimate of 42.3, indicating a contraction in the manufacturing sector. Production declined, and new orders decreased at a faster rate due to lower domestic and international sales, resulting in fewer backlogs and job cuts. The Port of Hamburg is resilient in the face of potential supply chain disruptions caused by an upcoming strike by the German Union of Locomotive Drivers (GDL).

A study by the German Federal Logistics and Mobility Office (BALM) showed positive trends in container transport by water and rail, with an increased share of rail freight. Bremerhaven also saw an increase in the share of rail freight, although the absolute growth in container transport by rail was lower than Hamburg's. In the first half of Q1, industrial production in the euro area and the European Union declined by 3.2% and 2.1%, respectively, compared to the previous month after adjusting for seasonal fluctuations.

Throughout this month, the price of Naphtha in Europe has been steadily increasing, impacting Benzene prices as naphtha is the primary resource required during Benzene production. This decrease may be reflected in the current pricing trends of Benzene in the European Naphtha market, driven by EU sanctions against Russian oil products and the consequent shortage of Europe's main oil product supply.

Simultaneously, the tightening supply situation in European markets has led to an increasing flow of oil products and derivative (Benzene) into Asian markets. The increase in Naphtha demand, which has recently reached its highest level in months, is driven by the growing need for Gasoline blending in Europe. As per ChemAnalyst, Benzene prices in the European market are anticipated to move steadily in the positive direction amidst the tight supply and the continuous demand and rise in Brent crude oil and naphtha prices.

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