Asia toluene prices plunge to 16-month low on weak crude, demand

04 June 2012 05:30  [Source: ICIS news]

SINGAPORE (ICIS)--Toluene prices in Asia plunged below $1,000/tonne (€810/tonne) FOB (free on board) Korea for the first time in 16 months on the back of a downturn in Brent crude futures over the weekend and poor demand in the region, said market participants on Monday.

Prices were assessed at $965-980/tonne FOB Korea on Monday morning, $55-60/tonne lower than the close of trade on 1 June and the lowest since 7 February 2011, according to ICIS pricing data.

Offers for cargoes loading in the second half of June and July were lower at $980/tonne and $975/tonne FOB Korea respectively. Buyers remained at the sidelines.

Offers for August-lifting lots at $970/tonne FOB Korea met bids at $940-958/tonne FOB Korea.

Prices were tracking the sharp falls in crude futures, while demand is weak from China, southeast Asia and India, said market participants.

The market may see further downside in the near term if crude and naphtha continue to fall, they added.

Demand for toluene from regional buyers has been weak in recent weeks, adding further downward pressure on the market, they said.

“In terms of numbers, [it] looks cheap… but still the naphtha-toluene spread is ok, so suppliers [are] happy to sell,” said a Singapore-based trader.

However, the regional importers in China, southeast Asia and India are likely to incur losses because of the sharp plunge in FOB Korea prices in recent weeks, he added.

Toluene prices in Asia have fallen by $235/tonne, down by 19% since 1 May this year, according to ICIS pricing.

($1 = €0.81)

By: Mahua Chakravarty
+65 6780 4359

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