The opening of a butadiene arbitrage window to Asia has lent some support to European and US butadiene prices, sources said.
The European market was boosted by a strong rise in Asian values last week. But European sources continued to bemoan the poor state of global fundamentals.
CFR China butadiene prices were assessed by Platts at $1,100/mt this week, $245/mt up from the July 23 assessed level of $855/mt.
European FOB Rotterdam spot prices were assessed by Platts at $667.50/mt Thursday, up $15/mt from last week’s level of $652.50/mt.
But with freight costs to China’s main port hub now at around $400/mt, according to one trader, there seems to be little room for a similar rise in European prices.
“I heard people talk about $1,100/mt in Asia, freight from Europe is $400/mt [so] yes, approximately $650-700/mt FOB R’dam,” a trader said.
Some sources said that the rise in Asia had contributed to greater uncertainty in the European and the US markets, with the Eur250/mt slump in August’s Northwest European contract prices to Eur750/mt, from July’s Eur1,000/mt.
The US contract fell to 43.50 cents/lb or $958.74/mt FOB USGC, down from 69.50 cents/lb or $1,531.78/mt in July.
“In the US, people are now thinking have we gone too far down? How far will the [Asian] price increase through August?” said one trader.
Source: platts.com
