There are limited styrene monomer imports coming into the Amsterdam-Rotterdam-Antwerp hub from the US Gulf Coast this month despite substantial premiums over US prices, as supply tightness in the US is limiting availability of material for exports, industry sources said.
Northwest European styrene monomer barges loading in July were assessed at $1,305/mt and in August at $1,285/mt, putting the 5-30 day forward assessment at $1,300/mt FOB ARA Monday.
With freight between the regions at $53/mt and US prompt styrene at 54.65 cents/lb ($1,205/mt) FOB USG, the USG-ARA arbitrage for both months is wide open.
“The arbitrage from the US is open, but they’re still tight from turnarounds as well — it’ll take a little while longer to see the tightness in both regions fully subside,” a trade source said.
This comes after Lyondell Basell’s Channelview, Texas propylene oxide-styrene monomer unit restarted after a six-week turnaround in mid-June.
NWE styrene prices have maintained healthy premiums to US prices throughout 2015 as turnarounds at European production units during February-June left a supply gap that needed to be filled with imported material.
However, some market participants said the supply tightness in the NWE market has not fully abated as the warmer weather in Europe has caused styrene producers to lower run rates to relieve the strain on cooling systems in the production units.
This was limiting availability of prompt material and spurring a need to attract imports.
Current prices put the ARA-USG spread at $95/mt. This is 40% or higher than the June average of $68/mt but substantially lower than the March average of $174/mt when supply tightness peaked.
– Platts.com
