01 April 2011 16:15 [Source: ICIS news]
LONDON (ICIS)--European April toluene contracts have been confirmed at $1,075–1,085/tonne (€753–760/tonne), down $5/tonne from the previous month, buyers and sellers said on Friday.
One consumer said that it had settled two contracts at $1,080/tonne and one at $1,085/tonne, citing balanced fundamentals in a thinly traded market for the relative stability from the March settlement.
Another buyer later said that it had settled April at $1,079/tonne, while a producer said that it had settled April contracts at $1,080–1,085/tonne. There was talk of some settlements above this level but this remained unconfirmed.
A major European supplier later said that it had settled contracts within a range of $1,075–1,085/tonne.
The slight drop in numbers caught many sellers by surprise. With gasoline numbers moving as high at $1,066/tonne on Friday, several players said that they believed European values should be higher than $1,100/tonne.
“There is very little being traded,” said one seller. “So the numbers are a bit notional. However, they are not very reflective.”
Another supplier said that with the US market currently valued at around the $1,175/tonne mark, there should in theory be players shipping volumes for export to the US.
But the market was well balanced and there were no surplus volumes available on the spot market, and this was perhaps keeping price ideas muted.
A drop in benzene numbers has made the hydrodealkylation (HDA) production process economically unfeasible, and there is some speculation that this has kept a lid on spot values.
One producer said that the parcels seen in the middle of March had fixed buyers’ price ideas around this level, despite a shift in market fundamentals.
However, with the majority of HDA units running from a TX (toluene/xylene) stream as opposed to pure toluene, the impact on the northwest Europe supply/demand balance was likely to be negligible.
The contracts are agreed on a free on board (FOB) northwest Europe (NWE) basis.
($1 = €0.70)
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