29 July 2011 06:16 [Source: ICIS news]
(adds details of Japan market, trends in benzene values)
SINGAPORE (ICIS)--Asia’s toluene values hit a three-year high on Friday morning on the back of a spike in benzene prices and prevailing tight availability in this region, said traders.
Spot toluene prices touched $1,195-1,205/tonne (€837-844/tonne) FOB (free on board) Korea, up by $15/tonne from Thursday’s close, according to ICIS data.
Prices last breached $1,200/tonne FOB Korea on 23 July 2008 before the onset of the global recession and its crashing impact on the region’s aromatics markets.
A deal for September loading was heard around midday on Friday at $1,200/tonne FOB Korea, while bids for September were heard at $1,196/tonne FOB Korea.
An offer for prompt lifting in the second half of August was heard at a premium of $1,210/tonne FOB Korea.
Supply was tight in this region as a key plant in southeast Asia had begun a turnaround, while there were limited exports coming from Japan, said a key Korean trader.
In Japan, supply was tight as crackers were operating at reduced rates, while refineries were using more toluene for blending, said a key Japanese trader.
Some Japanese traders were heard to be still in the spot market to purchase material in order to cover the shortfall created by the country’s blending demand, he added.
The region’s toluene market was also closely tracking the trend in benzene, the other key aromatics market, traders added.
Benzene spot prices were $15-20/tonne higher on Friday at $1,210-1,220/tonne FOB Korea, a total gain of $35/tonne from last week’s prices.
“Prices are also higher due to traders’ play for the month of September, which had resulted in October being $15/tonne lower,” said the Korean trader.
Meanwhile, this week’s spike in toluene prices belied the weak demand for imports from the region’s largest market, China, traders said.
Demand for imports from China remained lacklustre as domestic market prices are way below FOB Korea values, they added.
Demand from the solvents and gasoline blending sector in China was also persistently weak, which had also killed the appetite for imports, trader said.
($1 = €0.70)
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