Asia-US benzene arbitrage window re-opens after 10 months

20 November 2013 09:03  [Source: ICIS news]

SINGAPORE (ICIS)--US benzene prices surged overnight, re-opening the Asia-US arbitrage window that had been closed for 10 months, market players said on Wednesday.

Spot January cargoes in the US are now priced higher by $60/tonne (€44/tonne) than in Asia, where prices stood at $1,270/tonne FOB (free on board) at midday.

In the US market, benzene prices closed at around $4.42-4.44/gal FOB (free on board) US Gulf on Tuesday, up by more than $0.10/gal from the previous day, according to ICIS.

“The price gap is sufficient to cover the freight cost [of a 6,000- to 15,000-tonne vessel] from South Korea to the US,” a trader said.

A flurry of deals emerged in the Asian morning trade for January loading, because of the possibility of arbitrage trades to the US.

“Some traders are considering to move some cargoes to the US. We have been waiting for nearly a year,” a second trader said.

In December, pure term benzene volumes – comprising about 12,000 tonnes from South Korea and 20,000 tonnes from Japan – will head to the US, traders said.

($1 = €0.74)

Author: Ong Sheau Ling

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