European styrene prices continued to fall Tuesday, continuing the bearish domestic trend seen since the start of September as sellers continued to look to offload excess supply in Europe.
However, sources pointed to alternative export demand coming from Asia which could add support to Europe.
At the start of the day spot prices were seen priced at $1,580-1,600/mt FOB ARA for both October and November loading barges. At some point bids were reported at $1,585/mt versus seller ideas at $1,605/mt.
One European trader said some private and confidential business may have traded at around $1,600/mt FOB ARA with a view for export to Asia. Details of the transactions could not be confirmed, however.
With the Asian market assessed at $1,723/mt FOB Korea and $1,749/mt CFR China on Monday, and European barges at $1,605/mt FOB ARA, this arbitrage now provided an alternative outlet for traders, with additional cargoes in need of a home, sources said.
With freight at approximately $90-100/mt, cargoes could be landed in Asia at a profit.
Asian markets were closed Tuesday for a public holiday.
"Asia is tighter than here and I don't expect it to end soon. People are looking at it [the arb]. I would definitely look into in. A big chunk is going to the Med; quite a lot exported, [about] 15-20kt between here and the Med," a trader said Tuesday.
"If we export out then we clean the [excess] inventories [in Europe]." Most of the product was said to be held by traders, with producers and consumers holding little in stock.
The same source said exports to Asia were expected to be formalized soon, with the turnaround season in Asia expected to keep some production capacity out in January. "It may last into the first quarter," the trader said.
