Mumbai, March 19: Benzene prices has risen by around 53 per cent since January this year in the local market, primarily following the continuous rise in crude oil prices. On Thursday March 16, the chemical was quoted at Rs 23,000 per tonne, up from Rs 15,500 per tonne quoted in December 1999.Rising demand for benzene too has contributed to the price rise, traders feel. Its higher price level may last only for a short period. "Heavy direct import of benzene have been going on since a few months. As a result of these imports, benzene prices are likely to go down in the near future", said a leading importer.Imported benzene, availbale at 10 per cent lower than the domestic price, has made consumers go in for imported product. Domestic manufacturers sell benzene at around Rs 23-24 per kg, while imported benzene is available at around Rs 21-22 per kg. Among the various applicaiton, benzene is mainly used in detergents, solventa, ethylbensene, styrene, nitrobenzene, aniline, nylon, various dyes. Bharat Petroleum, Kochin Refineries, NOCIL and Oswal Petorchemicals are among various producers of benzene here.
Chemical Market Associates (CMA), Inc., Houston, has projected global benzene demand to increase at 33.5 million tones in 2002 which was 27.1 million tones in 1997-98, a jump of around 23 per cent.
According to CMA, gasoline lesgislations in western Europe would require phasing out of benzene between 2000 and 2005 and this will also affect the benzene market. Add to that, surplus production from Saudi Arabia too will affect global trade pattern after 2000. This will have impact on global benzene pricing due to the oversupply of this chemical. At international front, it is estimated that benzene prices are likely to remain static and not decline due to sluggish demand and rising supply. The international price of Benzene is being quoted between at $350-380 tonnes in the current month.
One of the major application of benzene is on the making of styrene. The styrene production is forcast to see growth rate at 4.3 per cent per annum and is likely to touch 21.9 million tones by 2002 from around 14.3 million tones. Due to heavy demand in the Asia-Pacific, it is estimated that More than half of the benzene out of 21.9 million tones will be consumed in the Asia-Pacific region by 2002, though at present growth in the region is slow. At present the South-East region accounts for only five per cent of the world market. The impact of past economic crises in this region does not seem to have affected the global styrene market.
On the other side, global styrene capacity is increasing at a rate of one million tonnes per annum and during the next five years, five million tonnes of new capacity is scheduled to come on stream. All these factors are likely to contribute in stagnant prices of benzene for next couple of months, traders say.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.