Possibility of paraxylene arbitrage from Asia to US East Coast, Canada being explored

25-Jun-15

An arbitrage has opened on paper for paraxylene shipments from Asia to the US East Coast or Canada, but high freight costs and tight availability of ships are obstacles still being negotiated, traders said in Platts. The typical freight cost for 10,000 mt of aromatics from South Korea to the US Gulf Coast is around US$54-59/mt but to make the trip further to the east coast of US it would come to about US$80-100/mt, traders said. Bids are well above US$1000/mt CFR USEC. A trader based in South Korea said his company was trying to make a deal with buyers in the US, but had not yet fixed any shipments. Other traders had also eyed the arbitrage, they said, but none said any shipments had yet been fixed. The Asian PX price was last assessed at US$920.50/mt FOB Korea and US$941.50/mt CFR Taiwan/China on Tuesday, while the US Gulf Coast price was last assessed at US$920/mt on Tuesday. However, several sources said obstacles were the cost of freight and actually finding an available ship to do the unusual route from Northeast Asia or other parts of Asia to the USEC -- where buyers in the downstream purified terephthalic acid industry are located -- as opposed to going to the US Gulf Coast, the common route.