The US-Europe styrene arbitrage window was open, according to Platts data, and cargoes had already been fixed for shipment to Europe, sources reported Monday.
In addition to the likelihood of US cargoes being fixed to Europe, others were on their way from Asia, ensuring that Europe was the highest-priced region.
With US Gulf Coast parcels last assessed by Platts at 68.25 cents/lb ($1,504/mt), European barges assessed at $1,575/mt FOB Rotterdam and freight of around $60/mt and additional logistics costs of no more than $10/mt, barges could be shipped into Rotterdam at a small profit. On Monday, the NWE 3- to 30-day market was assessed at $1,575.25/mt.
One consumer reported that a 5,000-mt parcel loading this week in the USG had been "organized to Europe" by a trader.
"I'm getting the biggest part of it," the consumer noted. The source would not reveal the price but said he was paying "below current levels in Europe."
"The key to success (in shipping at the moment) is availability of molecules and vessel space," the consumer said.
With the steep April-May backwardation flattening last week, this made the possibility of guaranteeing a profit margin more likely, given that any sort of backwardation would risk eroding profit margins if vessels were delayed into May.
In Monday's European market, a minor --$5/mt -- backwadation was observed, but sources said that this was temporary and would likely flatten again soon.
The arbitrage also looked open from Asia. Asian spot prices rose marginally to $1,452/mt FOB Korea, enabling a profit to be made from shipping to Europe, if that profit could be locked in by selling the parcel in Europe.
One source said that a parcel due to arrive in Europe last week had been delayed, leading to short-covering. Details of the fixture could not be confirmed by time of publication.
