Cash diffs diverge strongly to shut West-East arbs but situation looks unsustainable

Commentary summary:

• Arbs from the Med into the Far East are closed on strong cash diff moves either side of the Suez.

• NYH remains extremely well supported, with arbs open from NWE, the Med, and the USGC across qualities.

• MED fob premia in particular look overdone, with arbs out of the region now closed across the board.

• Asian petchem margins have yet to give clear direction following the imposition of 10% tariffs between China and the US, but missing petchems from the US into China should be broadly supportive for Asian steam crackers.

Arbs from the Med into the Far East have taken a dramatic turn in recent days, with European fob premia rising strongly, freight rates moving consistently higher, and CIF premia in Chiba/Yeosu falling sharply.

Philip Jones-Lux is Senior Analyst for Sparta. Having worked with organisations such as JBC Energy and RP Global, Philip is a seasoned energy market analyst with expertise across the oil barrel and power markets

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