NewsFlashAsia’s toluene hits high on energy, China

18 April 2008 13:51  [Source: ICIS news]

SINGAPORE (ICIS news)--Asia toluene reached an all-time high at $1,045-1,060/tonne on Friday on the back of the rally in the energy complex and renewed demand from the key Chinese market, said traders and producers on Friday.

A deal was reported for second half of May loading at $1,057/tonne FOB (free on board) Korea during open market trading.

Offers for H2 May loading were also heard at $1,065-1,075/tonne FOB Korea, with no bids heard, according to global chemical market intelligence service ICIS pricing.

Prices have hit a record high and are likely to remain strong in the coming weeks, said traders. Toluene last reached the $1,050/tonne FOB Korea mark on 6 June 2006, with the closing assessment on that day at $1,035-1,050/tonne FOB Korea.

The key supporting factor to this increase was the increase in crude values to $115/bbl this week and the steep jump in naphtha to around $950/tonne CFR (cost and freight) Japan.

Firmer demand for imports from China, Asia’s largest market for toluene, also buoyed market sentiment, they added.

Since the fourth quarter of 2007, demand for imports from China had been lacklustre due to the weak domestic market trend and slow downstream demand.

But the yuan (CNY) 350/tonne week-on-week jump to CNY8,850-8,950/tonne ex-tank supported the hike in CFR China bids this week, said a South Korean producer.

This week’s firmer demand from China also came on the back of lower inventory levels in eastern China and lesser supply from a local producer which could use more toluene for gasoline production in line with recent government regulations, he added.

($1 = CNY6.98)

For more on toluene visit ICIS chemical intelligence

By: Mahua Chakravarty
+65 6780 4359

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