SINGAPORE (ICIS)--Click here to see the latest blog post on Asian Chemical Connections by John Richardson. The arbitrage window for moving northeast Asian polypropylene (PP) to the US in August was at $1,152/tonne compared with just $73/tonne a year ago. This was based on the China CFR benchmark price versus the US contract price minus freight costs.
Arbitrage for moving northeast Asia PP to Europe in September is also a lot stronger than a year ago.
This demonstrates that despite further surges in freight costs, the opportunities for PP and polyethylene buyers in the West to save money remain big, provided they can accept longer lead times.
And for Asian and Middle East producers, this is a great opportunity to relieve persistent oversupply.
Today's post also gives you a guide to what to expect in container freight markets over the 12 months. Big declines in freight rates seem unlikely as the divided polymers world - which we have warning about and discussing since last year – continues.
Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.