Asian benzene traders eye reopening of East-West arb window

25 March 2005 03:10  [Source: ICIS news]

SINGAPORE (CNI)--Asian benzene traders were holding on to their cargoes late on Thursday, anticipating a reopening of the East-West arbitrage window due to rising US prices, traders told CNI on Friday.

A South Korean trader said that the East-West arbitrage window may reopen for May cargoes if prices rise to $1,110-1,120/tonne FOB Korea. Asia is currently long on benzene, making potential sales to the West attractive.

US buying indications for May benzene were at $1,080-1,100/tonne FOB Korea, with the South Korean offers at $1,150/tonne FOB Korea.

US benzene prices for Apri cargoes were around $1,170/tonne FOB US Gulf Coast. Prices were expected to rise for May cargoes, making the arbitrage flow feasible even after factoring in freight rates between South Korea and US at $80-100/tonne, the trader said.

US benzene deals for April cargoes had risen to $3.94-3.96/gallon FOB US Gulf Coast  late on Thursday, up from $3.85-3.87/gallon FOB US Gulf Coast a day earlier, following the fatal BP Texas City plant explosion on Wednesday which left 14 dead.

The explosion occurred Wednesday at the refinery’s isomerisation unit, which increases the octane level of gasoline.

By: Prema Viswanathan
+65 6780 4359

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