In the second week of August, caprolactum prices softened reflecting weaker benzene and growing market length. Demand was bearish and low-end liquid spot offers were corrected down while offers for solid goods also fell. Upstream benzene market sentiment weakened as US crude futures was down for seventh consecutive week.
Benzene prices tumble but downstream remained firm
Benzene markets tumbled across regions and prices plunged sharply in Asia on weak demand amid excess supplies. The arbitrage window from Asia to US was firmly shut. In Europe, prices dropped amid demand gaps as it lost demand from styrene market with the benzene-styrene spot spread surging dramatically. In US, the benzene markets saw another decline as export opportunities to Europe were absent with the price spread narrowing.
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Oil and benzene prices supporting nylon chain, nylon yarn trends up
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Benzene prices have gained 14-16 per cent across regions in March, pushed by an uptick in demand and stronger crude as players in US wanting to open the arbitrage window from Europe amid tighter supply expectations. However, benzene prices were seen easing end March as upstream toluene cooled down while arbitrage window to US remained closed. The week also witnessed a rare reverse arbitrage move. An estimated 20,000 ton cargo was set to arrive in China from the US in March-end.
Chemical fibres feedstock become costlier on demand supply imbalance
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Crude oil prices have been firming up in recent weeks but the general view is that they will remain relatively low for some time yet. While supply will remain, the demand side may see nothing change much. USA still gives mixed signals, even with the benefits of cheaper gasoline while in Europe there are many problems, especially in terms of low consumer demand in the north and low employment in the south.
Nylon yarn makers enjoying increased margins despite soft pricing
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Increasing supplies of crude oil from North American shale formations continued to weigh heavily on prices this year, creating a glut in world markets and decreasing demand for oil from the Organization of the Petroleum Exporting Countries. OPEC forecast that its market share would be 5 percent lower by 2018 as shale supplies continued to increase faster than demand. However, OPEC Secretary-General Abdullah al-Badri believes that the 12-member cartel, which pumps a third of the world's oil, prices would recover next year.
