Record-high styrene prices in Asia are likely to begin attracting regular US export deliveries away from Europe, where demand has been cooling, European sources said this week.
Rising prices in Asia mean that the region has now overtaken Europe.
Platts assessed the Asian market at record highs of $1,804.50/mt FOB Korea and $1,833.50/mt CFR China on Monday. On Thursday, CFR China prices were assessed at $1,829.50/mt, whilst FOB Korea prices were $1,800.50/mt.
In the spot market, European styrene prices were assessed at $1,766/mt Wednesday, down $13/mt on the day.
"Asia will have 200,000 mt missing in the next two-and-a-half months [due to the start of turnaround season]. Regular US exports are around 40-50,000 mt/month. So if Europe imports 30,000 mt, probably the US has an incentive to send it [to Asia]," said one industry source.
This view was backed up by other sources.
"It's fairly logical to do that because that is where the money is," one trader said.
"[If] Europe is $100/mt lower than Asia, then the arb window to Asia will open," said a second industry source.
"We are running full and demand is very weak and we are concerned about prices. So it would make sense to send US material to Asia. The focus is on Asia at the moment," the first industry source said.
"You don't want to buy full [at these sorts of prices]. Spreads are very high in Europe and this is a concern. What happens if I buy raw materials and products which are at these sorts of prices and then derivative prices fall?," pondered the first industry source said.
The US was assessed by Platts at 77 cents/lb, or $1,697/mt FOB USGC, so with the Asian styrene market for H2 August Thursday assessed at $1,842/mt, the arbitrage window between the two regions is now technically open, sources said.
