04 July 2012 06:08 [Source: ICIS news]
By Doris Shen
Traders in east
This is much higher than spot prices at CNY 8,100-8,200/tonne ex-tank
Spot prices on a CFR China basis have also risen since late June in tandem with hikes in crude futures as well as toluene FOB
At present, discussions for July shipments were at $1,080-1,095/tonne (CFR CMP), equivalent to CNY8,200-8,300/tonne, importers said.
More than 25,000 tonnes of toluene for August lifting was purchased by importers at $1,085-1,110/tonne (CFR CMP), equivalent to CNY8,300-8,450/tonne in May and June, traders added.
Supply is abundant at present in
A large portion of the current stock is expected to be consumed in July although some cargoes may not be sold in the market as traders will not sell below cost, traders said.
“About 30% of the cargoes will be kept by traders as prices are expected to increase because of the high purchasing costs,” an east China-based trader said.
Demand from the downstream solvents sector is persistently weak, but demand from the chemical synthesis industry will likely recover in July following the restart of several plants, traders said.
Medium and small scale downstream solvents users, especially from the coatings sector have been suffering due to the weak economic environment and local government’s property controlling measures.
Most of the downstream solvents producers have either shut units or halved their operating rates because of limited orders and poor profits, which resulted in a reduction in toluene purchase.
However, toluene consumption from the chemical synthesis sectors in July is expected to increase as few units will be restarted in weeks ahead.
The chemical synthesis producers had shut units for maintenance or cut their operating rates in June due to limited profit margins amid falling benzoic acid and nitro-toluene prices, downstream producers added.
Sichuan Beifang Hongxing Chemical will restart its 50,000 tonne/year nitro-toluene unit following a scheduled shutdown for one month from early June, a company source said.
Lishui County Guanshan Fine Chemical also took its 40,000 tonne/year benzoic acid unit offline for one month from the end of May, a company source said.
The unit is still under shutdown and the specific restart date is not confirmed, the source added, declining to give further details about the delay.
Jiangsu Huaihe Chemicals also shut down its 80,000 tonne/year nitro-toluene unit for a week in early June.
Any other units that were shut and likely to restart soon.
Jiangsu Yangtze River Delta Fine Chemical Co. Ltd shut down its 25,000 tonne/year chlorotoluene unit for maintenance form 18 May to 20 June.
WuHan Youji Industries Co Ltd cut its 120,000 tonne/year benzoic acid unit operating rate from 100% to 75% in June.
Meanwhile, toluene market fundamentals in Asia have been weak in recent weeks on the back of poor demand from
Demand has also been slow from buyers in southeast Asia and
Toluene prices in Asia were hovering at $1,070-1090/tonne FOB
Additional reporting by Mahua Chakravarty
($1 = CNY6.36)
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