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Wednesday, August 10, 2022

Asia-Europe acrylonitrile butadiene styrene import arbitrage opens as Asia prices decline

The arbitrage to send acrylonitrile butadiene styrene to Europe from Asia is opening amid falling prices in the latter region, according to S&P Global Platts data.

The ABS FD NWE price was assessed at Eur2,020/mt ($2,183/mt) Wednesday, while the ABS CFR China price was assessed at $1,790/mt.

Taking $100/mt to cover freight and other administrative costs, the import arbitrage window is wide open.

The window has been widening in March as Asia spot prices continued to decline.

The CFR China price has declined $210/mt from the last week of February.

In contrast, the FD NWE price increased Eur120/mt during the same period.

The last time the arbitrage window was open was early November.

Indeed, Eurostat data shows imports in December and January fell 21%.

Strong feedstock costs — mainly butadiene and styrene — sent Asia ABS spot prices soaring between November and February.

The ABS CFR China spot price has fallen in March, but the European spot price resisted the declines amid tight fundamentals.

European demand was good, with one seller reporting full order books.

In addition, a source has said that Ineos Styrolution had reduced output in March due to minor works at its Antwerp unit which meant incremental spot volume was scarce.

European ABS sellers have faced competition from South Korean sellers, as they benefit from a free trade agreement between the EU and South Korea.

EU imports rose 18% in 2016 as a result of higher deliveries from South Korea.

While import offers were not heard in the European market this week, the open arbitrage may tempt European buyers to secure product in the next few weeks.

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