29 April 2011 10:54 [Source: ICIS news]
SINGAPORE (ICIS)--Inventory levels of toluene in eastern China’s shore tanks have hit the lowest in the past 15 months on the back of lower imports and improving downstream demand, traders said on Friday.
Stock levels were hovering at about 70,000-75,000 tonnes in the eastern parts of China, down by about 25,000-30,000 tonnes from the levels seen last week.
Stocks in eastern China have dipped below the 100,000 tonne mark for the first time since January 2010, said market participants.
Demand from the downstream solvents and blending sectors were improving within China, said traders.
They expected that demand from the blending sector would continue to support the market as gasoline prices could see further hikes, they added.
Local Chinese refiners were heard to be using more aromatics for blending purposes, which had tightened their supply for the local market, said local and regional traders.
Meanwhile, spot activities for import cargoes have been limited since February and this has further helped to draw down the stock levels, they added.
Toluene stocks shot past the 100,000 tonne level in the first quarter of 2010 and touched a historical high of 190,000 tonnes at the end of April last year.
Slow downstream demand, ample domestic availability and increased import volumes, mainly on a contract basis, were seen as the key factors for this persistent oversupply, said traders and producers.
This has also slowed down the liquidity as fewer importers stepped out to purchase spot cargoes, they added.
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