Europe naphtha arbitrage window to Asia opens after weeks

30 October 2013 16:27  [Source: ICIS news]

LONDON (ICIS)--The arbitrage window from Europe to Asia has opened up after weeks, prompting high-volume sales to the Asian market, industry sources said on Wednesday.

The price spread between Europe and Asia on Wednesday was the widest it has been since early August, according to ICIS data.

The east-west spread rose from $14-16/tonne last week to $18/tonne on Wednesday.

While dependent on factors such as freight rates, a minimum spread of $15-20/tonne is considered to be necessary for an arbitrage window to open to Asia.

The naphtha crack spread - the differential between ICE Brent crude oil and naphtah prices - strengthened to minus-$7.15/bbl on Wednesday from minus-$7.60/bbl on Tuesday as a result of the strong sentiment.

Naphtha prices rose to $913-915/tonne northwest Europe CIF (cost, insurance & freight) NWE (northwest Europe) on Wednesday, spurred by the higher crack spread and strong crude values.

($1 = €0.73)

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By: Cuckoo James
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