13 May 2010 07:23 [Source: ICIS news]
MUMBAI (ICIS news)--Indian demand for toluene is expected to grow at about 7.5–8% every year spurred on by the strong economic growth expected in the next few years, said traders on Thursday.
"India's toluene market will maintain growth at about 7% [in the next few years] and economic growth is the main reason," one key importer and distributor said, adding that there was still huge untapped potential in India.
The expected growth would come from the downstream pharmaceuticals sector, in which India was gaining dominance globally, traders said.
"A number of multi-national companies (MNCs) want to keep their presence in India in the pharma sector," the first trader said.
While local producers like Reliance Industries service the Indian market, there is a shortfall in domestic supply, which makes India a net importer of toluene from southeast Asia, South Korea, Europe and the Middle East, sources said.
Monthly imports into the country sometimes go up to 15,000 tonnes or beyond, which was well above the net monthly demand of 12,000–14,000 tonnes, they added.
Toluene, one of the key aromatics with a wide range of applications, is used for making solvents, meant for paints, coatings and thinners.
In India, toluene is mainly used in the pharmaceuticals industry, which makes up 22–23% of the total demand, traders said.
Specialty chemicals consume about 18–20% of the toluene while the downstream solvents market also makes up a small amount of the total demand in this country, they added.
There is very limited usage of toluene for gasoline blending in India, and this application is still considered illegal, they said.
In the domestic market, demand was sluggish this week on the back of ample inventory. Local prices by importers were pegged at about Indian rupees (Rs) 44.50–45/kg. (44,500-45,000/tonne) ($989-1,000/tonne).
($1 = Rs45)
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