Asia's phthalic anhydride producers were unable to use an arbitrage opportunity to sell their product into the US even as a difference of about $220/mt developed between the price in Asia and the US, industry sources said this week. Last Thursday, PA was assessed at $1,210/mt CFR China and at $1,430/mt FOB US Gulf Coast, and prices in both markets remained stable from last week. Import duties and an insistence of US buyers to buy in molten form -- as opposed to the flakes in which the chemical is produced and shipped in Asia -- has made it impossible for Asian producers to export the petrochemical to the US, traders in South Korea and India said. There is also a shortage of suitable vessels in which they could transport the molten cargo, the traders added.
"We are unable to use the arbitrage opportunity," said a senior trader at Aekyung Petrochemical, which runs a 185,000 mt/year plant at Ulsan in South Korea.
"Shipping flakes in molten form will require transporting them in special tankers, in which they can be stored at a temperature of 140-150 degrees centigrade. And it's difficult for us to arrange such containers," said Mayank Dhanuka, the President of India's largest PA producer IG Petrochemicals Limited. IGPL runs a 120,000 mt/year PA plant at Taloja near Mumbai.
A company source at OCI Chemicals, that runs a 80,000 mt/year plant at Pohang in South Korea said that enquiries to offer the product in the US has not seen much interest so far. "We have had enquiries for very small quantities of PA so far."
While Indian producers claimed that no duty was being charged on their product being exported to the US, those in South Korea said that a duty of 5% was being charged on their product being exported to the country.
Freight of a 1,000-2,000 mt liquid chemical cargo heading to the US from South Korea stands at $105-110/mt. A source at India's second-largest PA producer Thirumalai Chemicals said that to ship PA to the US West Coast from the company's 110,000 mt/year plant in Chennai, he would pay a freight little higher than $100/mt. A South Korean cargo takes about 20 days to reach the west coast and about 30-35 days to reach the east coast. A ship carrying PA sailing from India takes about 20-25 days to dock at the US East Coast, and 35-40 days to dock at the west.
"We are unable to use the arbitrage opportunity," said a senior trader at Aekyung Petrochemical, which runs a 185,000 mt/year plant at Ulsan in South Korea.
"Shipping flakes in molten form will require transporting them in special tankers, in which they can be stored at a temperature of 140-150 degrees centigrade. And it's difficult for us to arrange such containers," said Mayank Dhanuka, the President of India's largest PA producer IG Petrochemicals Limited. IGPL runs a 120,000 mt/year PA plant at Taloja near Mumbai.
A company source at OCI Chemicals, that runs a 80,000 mt/year plant at Pohang in South Korea said that enquiries to offer the product in the US has not seen much interest so far. "We have had enquiries for very small quantities of PA so far."
While Indian producers claimed that no duty was being charged on their product being exported to the US, those in South Korea said that a duty of 5% was being charged on their product being exported to the country.
Freight of a 1,000-2,000 mt liquid chemical cargo heading to the US from South Korea stands at $105-110/mt. A source at India's second-largest PA producer Thirumalai Chemicals said that to ship PA to the US West Coast from the company's 110,000 mt/year plant in Chennai, he would pay a freight little higher than $100/mt. A South Korean cargo takes about 20 days to reach the west coast and about 30-35 days to reach the east coast. A ship carrying PA sailing from India takes about 20-25 days to dock at the US East Coast, and 35-40 days to dock at the west.
