FocusAsia benzene sellers in mad rush to export to US, EU

28 January 2011 08:14  [Source: ICIS news]

By Mahua Chakravarty

SINGAPORE (ICIS)--Asia’s benzene exporters are scrambling to export more volumes to the US and Europe, where cargoes currently fetch much higher prices, said market sources on Friday.

The window for arbitrage trades between Asia and the West was wide open following recent surge in benzene values in the US and European markets, which could push Asian prices higher in the near term, traders said.

“There is more room for Asian benzene values to go up,” said a Korean seller.

Asian prices were $190-255/tonne (€139-186/tonne) lower than US benzene prices and $245-250/tonne less than European prices.

Exporters enjoy healthy margins as these price gaps were much higher than the current cost of shipping benzene from Asia westwards.

Freight rates from South Korea to the US were estimated at about $55/tonne this week and at about $80-90/tonne from South Korea to Europe, market sources said.

About 80,000 tonnes of benzene cargoes left the Asian shores in January for the US, market sources said. In February, another 50,000 tonnes of material from South Korea alone would head for the US, with more exporters trying to fix more cargoes for loading next month, they added.

Meanwhile, sources from the shipping industry cited about 20,000 tonnes of Asian benzene fixtures bound for ARA (Amsterdam, Rotterdam, Antwerp) late last week.

Spot benzene prices in Asia slipped $20-25/tonne on Friday morning to $1,125-1,135/tonne FOB (free on board) Korea, retreating from a fresh 28-month high hit on Thursday, largely due to a pull-back in crude prices.

But market players said the price weakness would be short-lived as Asian benzene would still have to catch up with the strong US and European values.

On Thursday, European benzene values were at $1,370-1,385/tonne CIF (cost, insurance and freight) ARA, while US benzene was at $4.40-4.65/gal or $1,315-1,390/tonne FOB Barges, according to ICIS.

($1 = €0.73)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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By: Mahua Chakravarty
+65 6780 4359

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