There was steady supply in the third quarter, with new facilities that were supposed to come on stream being delayed to the fourth quarter. A few planned turnarounds did little to surprise the market as participants were adequately prepared.

Elevated demand from the US and Europe in the third quarter stoked interest in Asia parcels. Relatively strong arbitrage flow was seen from Asia to the US and Europe. Chinese import demand remained weak, with users depending mostly on domestic cargoes. Otherwise, ongoing demand continued to be seen in Taiwan and southeast Asia.

Europe benzene supply lengthened towards the end of the quarter, after a tight few months which saw a steep $100/tonne backwardation on October. The price premium was because of limited availability for prompt material, and the expectation had been that October supply would improve, thereby also narrow the spread in pricing month on month. Supply was tight on reduced run rates, lengthier outages and unplanned glitches, along with fewer imports and more exports.

Demand has been lacklustre, as macroeconomic uncertainty blighted consumer confidence. A reduction in demand from mid-September to mid-November because of derivative styrene turnarounds eased supply tension for benzene. There is planned maintenance at Ellba’s 550,000 tonne/year Moerdijk facility and the LyondellBasell / Covestro turnaround at the 680,000 tonne/year Maasvlakte site, both in the Netherlands. These were scheduled for around 22 September until 6 November and from mid-September until mid-November respectively.

Supply lengthened during the third quarter amid increased refinery rates during the summer gasoline season and sustained imports from Asia. Imports from Asia remained steady amid growing oversupply in the key China market and weak domestic operating rates for on-purpose benzene units. Poor margins have negatively impacted operating rates for disproportionation units.

Demand increased in the third quarter as downstream styrene production rates rebounded and imports from Asia were steady amid lower operating rates for on-purpose benzene units. The economics for toluene disproportionation units were disadvantageous. But downstream consumption was limited by under performance in certain sectors due to global economic headwinds.