19 May 2006 15:48 [Source: ICIS news]
LONDON (ICIS news)--The May European toluene contract was agreed at $860/tonne, a producer and consumer said on Friday.
The contract, on a free on board (FOB) Northwest Europe (NWE) basis, was up $95/tonne on the April contract.
"We have finally finished our contract discussions and it has been a hard fight," the producer said. "We have two markets at the moment, the gasoline market and the chemical market and we are being pushed from the refinery but we also have a commitment to chemical consumers," he added.
Some contract business had already been agreed on the last day of April, in line with the spot prices of the day which were around $810-835/tonne FOB Rotterdam. Exact confirmation of the number agreed between the parties involved was unknown.
The strength of European toluene during April/May was being driven by strong demand from the US as gasoline blenders sought alternative barrels to boost octane levels.
Spot toluene hit record highs on Wednesday amid reports that cargoes had changed hands at up to $900/tonne on strong demand from the US gasoline pool.
Although spot toluene prices dropped below $900 on Thursday on the back of bearish US weekly crude and products stock data, sources in the US said that toluene may not have peaked yet since the US driving session did not officially start until 1 June.
Spot toluene drifted lower on Friday with gasoline and was valued at $875-890/tonne FOB Rotterdam.
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