The price of toluene in the Gulf of Mexico showing seasonal weakness even as the Korea benchmark rises on steady demand, has led to an arbitrage window from the US to Northeast Asia opening on paper.
The FOB Korea marker was assessed at $1,153.50/mt on Tuesday, up $25/mt from Friday last week while FOB USG was assessed at 348 cents/gallon or $1,057.92/mt, flat from Monday. There were no assessments from Singapore Monday as it was a public holiday.
As such, the difference between the US Gulf toluene price and South Korea was $95.58/mt Tuesday compared with $70.58/mt on Friday last week. With freight for a 5,000-12,000 mt cargo from the Gulf of Mexico to South Korea assessed at $75-82/mt on Monday, the arbitrage window is now technically open.
A US-based trader said that he was looking to bring deepsea cargoes from the Gulf of Mexico to Northeast Asia, noting that seasonal weakness was keeping prices low in the US.
Meanwhile, the FOB Korea price has stayed steady on high crude price and strong demand.
Thailand's IRPC will not be offering any aromatics cargoes from October to December as its petrochemical plants and refinery at Map Ta Phut in Rayong province are undergoing maintenance from November 1 to December 15. Its aromatics plant can produce 130,000 mt/year of toluene.
South Korea's Honam Petrochemical shutting its steam cracker and downstream units at Daesan for scheduled maintenance from October 10 has also supported demand in Asia. During the turnaround, which is to end Wednesday, downstream units including a 150,000 mt/year butadiene extraction unit and a 120,000 mt/year toluene distillation column were shut.
