The arbitrage window for shipping mixed aromatics and reformate from Europe to Asian buyers has become more challenging, as gasoline cracks in Europe have risen on a strengthening gasoline complex in the US East Coast. Premiums for aromatics such as mixed xylenes and toluene have fallen since earlier in October, partly because the demand for mixed aromatics parcels to move to Asia has halted, sources have said.
“Premiums eased since stronger gasoline cracks closed the mixed aromatics arbitrage to China,” said a chemicals trader.
The toluene and solvent MX premiums to the October Eurobob gasoline swaps were both assessed at $68/mt Tuesday, down from the high $80’s/mt at the start of the month.
A 60,000 mt reformate cargo left Europe on Monday for Singapore, and a further 80,000 mt is to be exported from the Mediterranean, loading on October 22, for the same destination.
Talks took place in the market on reformate going to the Far East on Long Range 2 tankers and Medium Range tankers. But the LR2 cargoes were withdrawn due to rising gasoline cracks.
“There was Petco, Winson Oil, Mercuria, Kolmar and AFCO that were looking to cover LR2 tankers for their reformate cargoes to Singapore for end and early October loading dates. Other than Petco which might be still sniffing for early November, all the cargoes were withdrawn,” a shipbroker said.
But a few cargoes were yet to be covered for the Medium Range tankers. “Petroinoes was looking to cover a 40,000 mt reformate cargo for October 28-30, AFCO wanted to book a ship for 40,000 mt reformate cargo to China for November 1-2, and Kolmar was looking to move a 40,000 mt reformate cargo to China for November 5-10,” the shipbroker added.
