09 May 2012 13:02 [Source: ICIS news]
SINGAPORE (ICIS)—Asia’s toluene prices slumped by $20/tonne on Wednesday on the back of bearish sentiment and expectations of persistent weak demand from China, said regional players.
Toluene prices were assessed at $1,160–1,170/tonne (€893–901/tonne) FOB (free on board) Korea on Wednesday, down $20/tonne from Tuesday, according to ICIS pricing.
Spot toluene prices have been on a downtrend this week, falling by $40–45/tonne compared with closing prices on 4 May.
Market sentiment has been weak because of the downturn in WTI crude futures since the end of last week to $96/bbl, players said.
Buy-sell ideas for June loading cargoes were heard at about $1,160–1,175/tonne FOB Korea on Wednesday.
“There seems to be a bit of a panic mood in the market today,” said a Singapore-based trader, referring to the sudden drop in prices.
Sentiment is bearish among regional players as the Chinese government is expected to announce lower gasoline prices, which could impact toluene demand in China, said some players.
Toluene is used as an octane booster for gasoline blending.
Demand for imports from China, the region’s largest importing nation, has been weak in the past few months because of a slowdown in demand from downstream sectors like solvents, they added.
In tandem with the overall trend, prices in the key east China market fell on Wednesday to yuan (CNY) 9,050–9,400/tonne ($1434–1490/tonne) ex-tank, down CNY100–150/tonne from Tuesday’s close.
($1 = €0.77)
($1 = CNY6.31)
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