Arbitrage opportunities for US Gulf styrene monomer to Northwest European opens

04-Feb-15

The upward trend in Northwest European styrene monomer prices has opened up arbitrage opportunities from the US Gulf as firming sentiment and a tighter supply outlook propelled NWE spot prices higher in H2-January, as per sources in Platts. "Since mid-January, the European market has been tightening up, so it is no surprise that other regions are looking to export here," a European consumer said. NWE styrene spot price for barges was last assessed at US$895.50/mt FOB ARA Friday. Since mid-January, spot prices have risen 22.6%, from US$730.50/mt. With USG prices at 38.75 cents/gal (US$854.05/mt) Friday and freight between the regions at US$40.50/mt, the arbitrage into Europe is currently open. Despite Asia being the highest priced region at US$923/mt CFR China, the longer delivery time and higher freight rates between the regions, make Europe a more attractive destination for US styrene. According to Platts data, freight between the USG and Far-East Asia is US$60/mt. Looking ahead, with market participants bullish going into February, the upward trend in the NWE market was expected to attract more material from other regions. "It seems the bottom has been reached. I'm expecting an upward trend for next month," a consumer source said Friday.