With the US styrene monomer price hitting a six-month low this week, the arbitrage to send cargoes from the US Gulf to Far East Asia has opened, traders said Friday.
Offers for cargoes loading in June in the US and arriving in Northeast Asia in August were seen from late Thursday, but no deals were concluded yet, trade sources said.
Overnight in the US, SM was assessed unchanged at a six-month low of 69.40 cents/lb ($1,529.60/mt) FOB USG Thursday.
SM prices for the month of August are not yet being assessed in Asia, but with a freight cost of $64-70/mt for 5,000-12,000 mt cargoes from US Gulf to East China, according to Platts freight assessments, it means cargoes could be priced around $1,590-1,600/mt CFR China for August arrival. The Asian SM market is currently in a contango structure and the second-half July laycan was Thursday assessed at $1,581/mt CFR China. The CFR China marker, which comprises H2 June and H1 July, was assessed at $1,580.25/mt Thursday, up 25 cents from the day before.
The arbitrage window is "just about open, [but I] did not hear any deals yet," said a Singapore-based trader.
Another trader based in China said the arbitrage had opened up on Thursday and offers were being made for June-loading cargoes out of the US.
