Although no deals were reported done so far, traders priced October loading barges at $1,190-1,200/mt FOB Rotterdam, while November was seen at $1,200-1,210/mt.
By mid afternoon, buy interest cooled slightly with October seen at $1,180/mt, while November was seen at $1,195/mt against the prevalent offer levels seen earlier.
One trader said that European prices were firmer not only due to the arbitrage to Asia that had opened last week but also due to the lower margins.
"I think that Europe should be higher looking at the (benzene-styrene) spread. The absolute price can go higher. End-of-year inventories (however) is a concern because of the need to keep a balanced market," a trader said.
Platts Monday assessed the benzene-styrene spread at $237/mt while breakeven is around $250/mt considering current styrene production costs. And with October benzene trading Tuesday at $935/mt CIF ARA, the spread comes to a range of around $260-270/mt, exceeding breakeven costs.
With CFR China prices assessed by Platts earlier Tuesday at $1,284/mt, and freight estimated at around $80/mt, a premium of around $100/mt was required to make any exports to Asia profitable, given logistics costs, according to the trader. "With FOB Rotterdam prices of around $1,200/mt, you
are not making a profit from exports," he said.
China Chemical Weekly: http://news.chemnet.com/en/detail-1411716.html
