Toluene prices in east China at 11-month low on falling crude

01 June 2012 05:41  [Source: ICIS news]

SINGAPORE (ICIS)--Toluene prices in east China have fallen to an 11-month low because of declining crude prices amid concerns about a slowdown in the country’s economy, industry sources said on Friday.

Toluene prices in east China were at yuan (CNY) 8,275-8,300/tonne ($1,299-1,303/tonne) ex-tank Zhangjiagang on 31 May, they said.

Some toluene traders took short positions amid bearish sentiment in the crude market. Many July-August toluene futures were sold at CNY8,200-8,300/tonne ex-tank Zhangjiagang in the second half of May, which put downward pressure on toluene prices, a trader said.

East China’s toluene inventory reached 70,000-75,000 tonnes after nearly 60,000 tonnes of toluene arrived in the region in May, according to Chemease, an ICIS Service in China.

Downstream producers stayed on the sidelines because of the ample supply and an uncertain price outlook, a trader said.

Most of the cargoes were imported at a cost of $1,235-1,240/tonne CFR (cost & freight) China and hence some importers were reluctant to sell toluene cargoes of more than 500 tonnes, preferring to keep the material in their inventories instead, according to the trader.

About 60,000-70,000 tonnes of import cargoes will arrive in east China during June which may limit the increase in toluene prices, according to market sources.

Most traders have suffered large losses at CNY400-600/tonne. Slight losses are usually at CNY100-200/tonne, according to market sources.

The decline in toluene prices maybe limited in June if crude prices stabilise, another trader said.

WTI crude prices were at $86.53/bbl on the close of trade on 31 May.

($1 = CNY 6.37)

By: Ariel Chen

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