LONDON (ICIS)–European benzene players are carefully watching spot market price developments for potential arbitrage opportunities across the Atlantic, sources said on Tuesday, with US Gulf numbers stabilising towards the end of last week.
US market activity was limited so far this week owing to the Labor Day holiday on Monday 7 September, but spot numbers had steadied themselves within a range of $2.03-2.08/gal FOB (free on board).
With freight costs from Europe to the US around $50/tonne, this would open up the arbitrage window across the Atlantic around the mid $900s/tonne CIF (cost, insurance and freight) ARA (Amsterdam-Rotterdam-Antwerp).
After trading yesterday at $565/tonne, September spot numbers were earlier today at $565-575/tonne while October remained in contango at $575-595/tonne.
“There is too much prompt material in Europe,” said one trader. “Demand from downstream markets is not great. Whether the current contango holds really depends on the US.”
One source said that European benzene liquidity remained thin into September, with only some industry players and a handful of traders driving the market.
“Nobody really sees anything moving out of the $550-580/tonne range at the moment,” the source added. “We will have to see where the US market goes this week.”