Arbitrage opens as downtrend in NWE styrene monomer opens export opps to US Gulf

16-Jan-15

The downtrend in Northwest European styrene monomer prices has opened up export opportunities to the US Gulf, sources said, a month after the US Gulf-Europe arbitrage was open, as per Platts. With Europe being the lowest-priced region, sources said any export opportunities would shorten the length in Northwest Europe. "The reverse arbitrage window from Europe into the US is open," a European producer said, adding two 5,000 mt parcels were being put together in Europe for export to the US. Northwest European styrene spot barges were assessed at US$730/mt FOB ARA Wednesday, down 36% month on month. During the same period, US Gulf prices fell 21% to 36.50 cents/lb ($804.46/mt) FOB USG Wednesday. With freight between the two regions at US$40.50/mt, the arbitrage is open. They attributed the steeper fall in Northwest European prices to differing operating rates for the regions. With US producers at reduced run rates and Europe yet to follow suit, the supply outlook in Northwest Europe looked ample and was prompting market participants to look for export opportunities. One source said imports fixed in December from the Middle East and the US were still arriving in Northwest Europe, adding further length to the supply chain.