Risky business for Europe to Asia benzene arb

15 February 2008 16:37  [Source: ICIS news]

LONDON (ICIS news)--The arbitrage window for benzene into Europe from Asia was open, market participants said on Friday, although no business had yet been done as volatility made taking a position risky.

 

Benzene was valued at $1,200-1,210/tonne CIF (€816-823/tonne) (cost, insurance and freight) for February in Europe at 14:30 GMT, with March at $1,190-1,200/tonne CIF ARA, according to global chemical intelligence service ICIS pricing. 

 

Values in Asia, meanwhile, were seen at $1,065-1,080/tonne FOB (free on board) Korea, some $130-135/tonne lower than Europe.

 

“It’s $100/tonne freight from Asia,” said on trader on Friday, “so it’s workable.”  The trader said, however, they had not heard of anyone doing so as prices were so volatile at the moment.

 

Deals had been done at $1,200/tonne CIF ARA on Friday afternoon, but as low as $1,157/tonne two days before. The market was also strongly backwardated, with the two forward months falling $10/tonne sequentially, suggesting a lower forward demand for material.

 

“With crude the way it is you’d be brave to attempt the arb,” said another trader, adding that market volatility made arbitrage options all but inoperable.

 

($1 = €0.68)

By: Peter Salisbury
+44 20 8652 3214

< previous article(VIDEO - ICIS news Europe Lunchtime Bulletin 27 October 2009)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly