India’s toluene prices rise further on critical cargoes shortage

20 September 2012 11:36  [Source: ICIS news]

SINGAPORE (ICIS)--India’s domestic toluene prices have risen further to reach new record levels amid very tight prompt supply since 22 August, despite the drastic plunge in Brent crude futures, said market participants on Thursday.

India’s domestic toluene prices rose by Indian rupees (Rs) 2.00/kg ($0.04/kg) from the previous day to Rs84.00-85.00/kg ex-tank on 20 September, while Brent crude futures fell to $107/bbl from $116/bbl in a span of three days, according to ICIS data.

“The market is going crazy, it is just chaotic. People having cargoes on their hands are just pushing the prices up very, very high,” an India-based importer of toluene said.

While prices in the regional FOB Korea market were falling in tandem with weaker crude futures, declines in India’s domestic toluene prices were curbed by the critical shortage of cargoes, added the source.

Normal inventory levels of toluene cargoes at the Kandla ports are around 15,000 tonnes, while the current inventory level is estimated to be only 3,000-3,500 tonnes, said the source.

However, market participants said that this situation was temporary as another 6,000-8,000 tonnes of toluene are expected to reach India by the end of September which will ease the tight supply situation. With an increased supply in the market, coupled with lower FOB Korea prices and upstream crude futures, India’s domestic toluene prices are expected to soften as well.

($1 = Rs53.99)


By: Jasmine Khoo
+65 6780 4359



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