Slow Downstream Demand Dives Benzene Prices in Europe
- 28-Nov-2022 12:57 PM
- Journalist: Francis Stokes
Germany- The European market continued to move southward as the end-use manufacturing units had ample feedstock available to cater to the domestic demand. Benzene manufacturing units and major suppliers received fewer inquiries about Benzene leading to a price decline in the European market. In the last week of November 2022, the price of Benzene has observed at USD 826 per MT, FOB Hamburg (Germany).
The Benzene buying activities and the declining feedstock prices in the regional market remained bearish. The WTI crude oil prices have slowed down, consequently impacting the production cost of Benzene in the European market. Furthermore, the European Union (EU) has softened key shipping terms and delayed the full implementation of its latest sanctions proposal for a price cap on Russia's crude oil exports. According to the official statements released by the EU member, adding a 45-day transition period to the implementation of the cap was proposed. The proposed grace period would apply to crude oil loaded before December 5, 2022, till January 19, 2023.
The cap would prohibit companies from providing shipping and services such as insurance, brokering, and financial assistance required to transport Russian Crude oil anywhere in the world unless the oil sold for less than the agreed-upon price. Implementing the cap would directly decline the importing prices of crude oil, subsequently reducing the Benzene prices in the European market. On the other hand, consumer purchasing activity has decreased because of the rise in living costs. As a result, the manufacturers decided to buy the product based on their daily needs. Furthermore, because the product is widely available, spot prices in the domestic market are falling.
Benzene demand from downstream construction sectors fell as the UK construction industry shrank due to lower orders. As a result, the growing threat of a recession halted the housebuilding and automotive industry. As per ChemAnalyst, the prices of Benzene may continue to follow the stagnancy in the European market.