The upward trend in Northwest European styrene monomer prices has opened up arbitrage opportunities from the US Gulf as firming sentiment and a tighter supply outlook propelled NWE spot prices higherin the second half of January, sources said Monday.
“Since mid-January, the European market has been tightening up, so it is no surprise that other regions are looking to export here,” a European consumer said.
The Northwest European styrene spot price for barges was last assessed at $895.50/mt FOB ARA Friday. Since mid-January, spot prices have risen 22.6%, from $730.50/mt.
With USG prices at 38.75 cents/gal ($854.05/mt) Friday and freight between the regions at $40.50/mt, the arbitrage into Europe is currently open.
Despite Asia being the highest priced region at $923/mt CFR China, the longer delivery time and higher freight rates between the regions, make Europe a more attractive destination for US styrene.
According to Platts data, freight between the USG and Far-East Asia is $60/mt.
Looking ahead, with market participants bullish going into February, the upward trend in the NWE market was expected to attract more material from other regions.
“It seems the bottom has been reached. I’m expecting an upward trend for next month,” a consumer source said Friday.
This comes as the NWE February styrene monomer contract price fully settled at Eur895/mt FOB ARA Monday, representing a month-on-month decrease of Eur55/mt from the January CP of Eur950/mt.
– Platts.com
