05 September 2012 13:11 [Source: ICIS news]
LONDON (ICIS)--The European September toluene contract has settled in a wide range, increasing by $133-172/tonne (€106-138/tonne) from last month, market sources said on Wednesday.
The September price, agreed on a free on board (FOB) northwest Europe (NWE) basis, settled in a $1,260-1,305/tonne range. Market sources said it was unusual to see such a wide range in the monthly contract price.
An initial settlement was agreed on Tuesday at $1,290/tonne by a major producer.
Since then, other settlements have been recorded at $1,260/tonne, $1,270/tonne and $1,305/tonne.
“It’s been an exciting market the last week and a half. The market has got really tight because of exports in early July and August and there are up and coming shutdowns,” said one producer.
“Contract discussions on Friday were very interesting to say the least.”
The producer said it was the widest spread in the toluene contract price range for “a very long time”.
Another producer, who settled its contracts at $1,290/tonne, said the increase from August to September was driven by limited availability which lifted spot prices during the month.
“Spot levels increased sharply during August due to limited availability and the September monthly contract price levels reflect the increase in spot market levels,” the producer said.
Spot toluene in Europe is currently valued in a $1,270-1,320/tonne price range and the most recent spot deal was done on Tuesday 28 August at $1,305/tonne FOB Rotterdam.
Looking ahead, sellers expect the toluene market to remain tight because of planned outages.
Total, Petrogal and Shell are due for turnarounds in the next couple of months, according to unconfirmed reports from market sources.
“The Petrogal refinery will be down for a few months so toluene could get very interesting. Some buyers might get desperate. It’s a weird situation really [for the spot market] because nobody has anything to sell so you could get a €100/tonne spread between the bid and offer,” said a European toluene seller.
($1 = €0.80)
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