India's toluene prices rise further as prompt supply tightens

06 September 2012 04:23  [Source: ICIS news]

SINGAPORE (ICIS)--India’s toluene ex-tank prices increased further to Indian rupees (Rs) 76.00/kg ($1.40/kg) ex-tank as priority was given to replenishing port inventories with newly-arrived cargoes, said a local distributor on Thursday.

The increase in India’s toluene ex-tank prices comes on the back of a previous record-high at Rs74.50-75.50/kg ex-tank on 22 August.

 Market participants had expected prices to soften upon the arrival of cargoes from 28 August, added the distributor.

However, the physical flow of toluene cargoes into the Indian market was hampered, which has pushed domestic prices up to new record highs, the distributor said.

There are no signs of a decrease any time soon as firm import prices of south Korean-origin cargoes, which were at $1,210-1,220/tonne (€956-964/tonne) CFR (cost & freight) India on 5 September, are supporting the high domestic prices, the distributor added.

According to market participants, the firm prices of toluene in Asia were a result of speculative trading, buying on a short covering basis, as well as tight prompt supply of cargoes.

Supply is tight because of regional plant shutdowns and reduced output volumes from some plants as producers chose to channel their toluene output to their own downstream units, where margins are more profitable, the participants added.

($1 = Rs55.91)
($1 = €0.79)

By: Jasmine Khoo
+65 6780 4359

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