28 November 2012 11:39 [Source: ICIS news]
LONDON (ICIS)--European toluene players are unsure of how December monthly contracts will shape up as spot activity remains subdued in an illiquid market, sources said on Wednesday.
“It’s been deathly quiet,” said one producer. “There’s no real sense of direction.”
Some concerns regarding availability of toluene di-isocyanate (TDI) grade material this month helped support offer levels in November. Offers were as high as $1,370/tonne (€1,055/tonne) for much of the month and there was a deal done at $1,350/tonne in early November, but otherwise spot activity has been limited.
Consumers, meanwhile, were looking to see if they could process lower grade material and therefore opt for lower prices.
Prices gradually started to edge down, aided by some softening of oil and energy numbers, but largely driven by falling demand as the year-end approaches.
“[Spot] prices should be below contract level in order to attract buying interest,” said one consumer.
One source in the distribution market quoted numbers below €1,100/tonne on a delivered basis, and felt that FOB prices were currently at $1,300/tonne or lower, albeit notional in a quiet market, adding that he expects further price erosion in December.
“People are sitting on inventories right now,” the distributor said. “We could see some really low number ahead of Christmas Eve. The problem is that December is only half a month; on the 17th, everything closes, so you only have two and a half weeks of consumption, which creates more downward pressure.”
Looking ahead into 2013, several sources said that availability in Europe could remain an issue, with strong derivative demand in markets such as Poland and Hungary keeping material from coming into the ARA (Amsterdam-Rotterdam-Antwerp) region.
($1 = €0.77)
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