Taiwan's state-owned CPC has issued a tender to buy benzene for the coming year.
The producer is seeking 15,000-18,000 t/month of benzene for domestic consumption in a tender issued yesterday. Offers are to be submitted by 11 November, and the producer expects to finalise the results of the tender around mid-November.
The latest spot deals for December-delivery benzene to Taiwan were concluded at a $14-15/t premium to fob South Korea prices, after benzene values fell recently to a 4 ½-month low. The premium had eased from $20/t to fob South Korea prices for November-delivery deals.
Term benzene contracts for 2019 were fixed at a $5/t premium to fob South Korea prices for delivery to Taiwan. Market participants expect the premium for 2020 to be higher than for 2019, based on recent spot deals.
The results of CPC's term purchase tender for benzene typically sets the pace for subsequent negotiations with other regional producers and buyers.
The market is divided on whether the rationalisation of paraxylene capacity will reduce benzene supply or capacity rationalisation in benzene derivatives will lengthen benzene supply in the coming year.
The petrochemicals sector will enter a period of capacity expansions from the last quarter of this year.
Brunei's Hengyi Petrochemicals achieved on-specification product over the 2-3 November weekend at its new aromatics unit, with a capacity of 500,000 t/yr for benzene. The producer is also actively negotiating spot and term deals for its benzene with market participants.
In China, Zhejiang Petrochemicals expects to soon start up the naphtha cracker and aromatics unit at its new mega refinery. The aromatics complex can produce nearly 1.5mn t/yr of benzene.