Traders are looking to send about 4,000 mt of Mexico-origin ethylene to Asia for mid-April loading to take advantage of higher prices than in the weak European market, sources said Thursday.
But they said the possibility of such a trade remained a long shot, given difficulty securing a vessel.
Typically, Mexico cargoes go to European countries like Belgium.
Platts assessed CIF Northwest Europe prices at $1,170/mt Wednesday. With freight for a 4,000-mt cargo from Mexico to Europe around $250/mt, the FOB Mexico ethylene price was estimated around $920/mt.
Despite Asia's higher ethylene prices, traders and brokers said securing a ship at a reasonable rate for the monthlong journey to Southeast Asia posed a challenge. Hypothetically, they estimated freight from Mexico around $400-500/mt, depending on vessel availability.
Given that freight estimate, Mexican ethylene would cost around $1,320-1,420/mt CFR Southeast Asia, compared with Wednesday's CFR Southeast Asia assessment of $1,435/mt.
A trader said that while the arbitrage might work, "it is a real challenge to secure [a] vessel" as it is not a typical route and shipowners would not likely be willing to take such a risk.
"You do not want your vessel to be empty when returning," the same trader said. "It is a waste of money."
A 9,000-mt Europe-origin cargo was being offered for June arrival in Asia this week. There were no offer indications for the cargo, but bid ideas were heard in the high $1,300s/mt CFR Northeast Asia.
Given freight estimates and current European prices, the cargo would cost at least $1,430/mt CFR Northeast Asia.
However, market sources said a Europe-to-Asia trade was also unlikely because of expectations of ample Asian supply in the second half of the year.
