04 May 2009 07:50 [Source: ICIS news]
By Steve Tan
SINGAPORE (ICIS news)--The arbitrage for deep sea propylene cargoes to Asia has firmly shut for June delivery amid falling regional prices and market uncertainty, trade sources said on Monday.
Last week, a Brazilian cargo of around 8,000 tonnes was sold to regional buyers in southeast Asia at a significantly lower price of $765/tonne (€574/tonne) CFR (cost and freight) for end June delivery, which effectively sealed the arbitrage shut, sources said.
It was the latest and possibly the last deep sea parcel sold into Asia from a string of arbitrage cargoes from various origins such as Spain, Italy, the US, Libya and Brazil, which were bound for Asia between end-April and early June.
With import prices in
“No way,” said a Singapore-based olefins trader with regards to whether arbitrage cargoes from Europe or the
He said the cost of bringing such eastbound cargoes from Europe to
“If things are bad in
Rising US domestic prices for May were also said to be sealing the arbitrage shut, with producers nominating May contract increases of 3 cents/lb ($66/tonne) on the back of tight supply and higher refinery-grade propylene (RGP) spot prices, which were posted between US 25-25.87 cents/lb ($550/tonne).
Freight costs remain on the high side with exports from the
Asian propylene spot prices, as of week ending 1 May, fell as much as $70/tonne to hit a low of $790/tonne CFR China for June discussions due to strong buyer resistance.
($1 = €0.75)
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