The spread between spot prices for benzene and naphtha in Europe has turned negative, reaching minus $2/metric ton, as feedstock naphtha values continue to increase amid healthy demand since September, according to the latest OPIS data.
The last time the benzene-naphtha spread turned negative was in November 2011 when it hit minus $1/metric ton, the data showed. Spot European benzene prices have been pulled lower since early August this year on the back of ample supply. Benzene is used in the manufacturing process for products including styrene, cumene, cyclohexane, and nitrobenzene.
The narrow spread in Europe indicates that demand for benzene from downstream sectors is weak due to seasonality and also the economic impact of COVID-19. However, the benzene spread to naphtha could turn around quickly should demand return. “Month-on-month benzene demand growth was rapid from April to September, but now seems to be stagnating,” says Simon Cleghorn, aromatics director consultant at IHS Markit. “The weak benzene-naphtha spread indicates that the market is oversupplied, and this is only likely to change to more normal levels once demand starts to pick up,” he says.
Benzene-naphtha spreads tightened at the end of March amid a sharp drop in oil prices, narrowing to $29.75/metric ton on 24 March. They recovered briefly mid-April to $160.50/metric ton, but have since moved downwards since early May, OPIS data showed. The spread was at $352/metric ton in January, amid stronger benzene prices arising from a reduction in supply.
“A low spread isn’t sustainable, but could last for some time, as long as we have an oversupply,” a market source says.
OPIS is an IHS Markit company.
By: Fahima Mathe
Source: Chemical Week
France has launched an offshore green hydrogen production platform at the country’s Port of Saint-Nazaire this week, along with its first offshore wind farm. The hydrogen plant, which its operators say is the world’s first facility of its type, coincides with the launch of another “first of its kind” facility in Sweden dedicated to storing hydrogen in an underground lined rock cavern (LRC).
The project sets up the Hydrogen Valley in Rome, the first industrial-scale technological hub for the development of the national supply chain for the production, transport, storage and use of hydrogen for the decarbonization of industrial processes and for sustainable mobility.
At first glance, hydrogen seems to be the perfect solution to our energy needs. It doesn’t produce any carbon dioxide when used. It can store energy for long periods of time. It doesn’t leave behind hazardous waste materials, like nuclear does. And it doesn’t require large swathes of land to be flooded, like hydroelectricity. Seems too good to be true. So…what’s the catch?
