SM arbitrage from Asia to Europe likely as spread hits 4-year high
speciality chemicals list in between European styrene monomer rates as well as Eastern SM prices broadened to a four-year high of $236/mt Tuesday, opening arbitrage opportunities, claimed investors Wednesday.
The FOB Amsterdam-Rotterdam-Antwerp SM rate was assessed up $15/mt at $1,665/ mt at London close Tuesday, while FOB Korea SM was up $5/mt at $1,455/ mt, Platts information showed.
The last time the spread was any kind of wider got on August 4, 2008, at $250/mt, when costs struck $1,772.50/ mt FOB ARA and also $1,522.50/ mt FOB Korea.
The Asian SM market, nonetheless, continues to be solid right now amid tight supply in China, yet rates are still far listed below Europe as Asian downstream demand is uncertain.
In Europe, while September is seen as firm currently amidst great derivative need, even more out October has additionally grabbed being assessed up $40/mt day on day to $1,550/ mt FOB ARA Tuesday, and narrowing the steep September/October backwardation from $140/mt last week to $115/mt this week. Fine_chemical in Europe makes arbitrage deliveries extra attractive for Asian sellers, said investors.
The arbitrage from Asia to Europe is broad open currently, with the products cost to send a 5,000-mt freight from Ulsan to Rotterdam at around $84/mt.
But delivery over such a long distance-- the trip takes about one month-- still involves some risk, particularly because the European market is in such a steep backwardation.
Market resources verified that investors were trying to ship SM from the Far East-- primarily from South Korea-- to Europe, however not much had actually been repaired yet due to tight vessel room.
" [Earlier] the European market was [outstanding] backwardated [for the] September/October [spread], now it appears that the US keeps reducing its place shipment quantities to Europe, which [is maintaining] the European market limited as well as the backwardation has alleviated," one trader stated Tuesday.
Decreased spot shipments from the United States were caused by current plant closures when faced with storms as well as planned maintenance.
The Westlake Chemical was still undertaking a turn-around at its 570 million lb/year (259,000 mt/year) Lake Charles, Louisiana, center this week. It started a turnaround at the start of August and also will remain closed right into September. Other SM manufacturers in the US have on the other hand shut their plants this week due to Storm Isaac.
The FOB Amsterdam-Rotterdam-Antwerp SM rate was assessed up $15/mt at $1,665/ mt at London close Tuesday, while FOB Korea SM was up $5/mt at $1,455/ mt, Platts information showed.
The last time the spread was any kind of wider got on August 4, 2008, at $250/mt, when costs struck $1,772.50/ mt FOB ARA and also $1,522.50/ mt FOB Korea.
The Asian SM market, nonetheless, continues to be solid right now amid tight supply in China, yet rates are still far listed below Europe as Asian downstream demand is uncertain.
In Europe, while September is seen as firm currently amidst great derivative need, even more out October has additionally grabbed being assessed up $40/mt day on day to $1,550/ mt FOB ARA Tuesday, and narrowing the steep September/October backwardation from $140/mt last week to $115/mt this week. Fine_chemical in Europe makes arbitrage deliveries extra attractive for Asian sellers, said investors.
The arbitrage from Asia to Europe is broad open currently, with the products cost to send a 5,000-mt freight from Ulsan to Rotterdam at around $84/mt.
But delivery over such a long distance-- the trip takes about one month-- still involves some risk, particularly because the European market is in such a steep backwardation.
Market resources verified that investors were trying to ship SM from the Far East-- primarily from South Korea-- to Europe, however not much had actually been repaired yet due to tight vessel room.
" [Earlier] the European market was [outstanding] backwardated [for the] September/October [spread], now it appears that the US keeps reducing its place shipment quantities to Europe, which [is maintaining] the European market limited as well as the backwardation has alleviated," one trader stated Tuesday.
Decreased spot shipments from the United States were caused by current plant closures when faced with storms as well as planned maintenance.
The Westlake Chemical was still undertaking a turn-around at its 570 million lb/year (259,000 mt/year) Lake Charles, Louisiana, center this week. It started a turnaround at the start of August and also will remain closed right into September. Other SM manufacturers in the US have on the other hand shut their plants this week due to Storm Isaac.
Public Last updated: 2021-01-23 03:39:36 PM
