Europe styrene market eyes Asia for exports as spot levels ease
Truong Mellor
16-Oct-2013
By Truong Mellor
LONDON (ICIS)–European styrene
spot levels have started to ease this week alongside falling
benzene prices, seasonally slow demand and global losses,
although the arbitrage window from Europe into Asia remains
open with players looking to capitalise on it.
With Asian spot numbers for December at
$1,680-1,685/tonne CFR (cost and freight) China and European
values moving below the $1,600/tonne FOB (free on board)
mark, there is an opportunity for exports out of the ARA
(Amsterdam-Rotterdam-Antwerp) region into Asia, with freight
and administrative costs in total around $100/tonne
(€74/tonne).
Spot values in Europe this morning were at
$1,570-1,585/tonne FOB Rotterdam for October, while November
was slightly higher with offers at $1,590/tonne.
Several European traders said they are
fixing vessels for export, and one major consumer estimated
that up to 20,000 tonnes could be leaving Europe for Asia in
the coming weeks.
However, prices in Asia have been
gradually easing off this week amid a growing sense of
bearishness from derivative markets as the year draws to a
close.
“A lot will depend on whether the
arbitrage window will stay open,” the consumer added. “If
not, that material will have to be sold into Europe so we
could see prices here drop even further.”
Despite one southern European producer
going into turnaround this month, several sources have not
seen any significant impact on the domestic market. Demand
from key derivative markets remains slow, and the rest of the
fourth quarter is expected to be subdued as players work down
inventory levels ahead of year-end.
However, with a major turnaround in the US coming up for November and December, which could potentially limit any export volumes from the region between now and the end of 2013.
There is some anxiety that, combined with the ongoing turnarounds in Europe,
ARA pricing could see another sharp upturn if players suddenly
have to cover short positions amid fewer US imports towards
the end of the year.
“We could be setting ourselves up for another
spike, even with low demand,” said one buyer.
($1 = €0.74)
Global News + ICIS Chemical Business (ICB)
See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.
Contact us
Partnering with ICIS unlocks a vision of a future you can trust and achieve. We leverage our unrivalled network of industry experts to deliver a comprehensive market view based on independent and reliable data, insight and analytics.
Contact us to learn how we can support you as you transact today and plan for tomorrow.