Europe spot toluene quiet amid balanced supply

15 March 2013 10:29  [Source: ICIS news]

LONDON (ICIS)--Balanced availability is preventing European toluene spot prices from dropping, despite a plummeting Asian market and no clear buying interest outside of contractual volumes, sources said on Friday.

“We are still running on high rates with our TDI [toluene di-isocyanate] plant and fully covered via contracts,” said one major consumer.

While European players have previously looked at the US Gulf market and potential arbitrage opportunities as a yardstick for domestic pricing, this no longer seems to be the case.

Players were also closely watching Asia, where toluene prices have slumped this month on weak demand from the Indian and Chinese markets and bearish downstream fundamentals. Poor offtake from the gasoline blending sector has also eroded market confidence.

Offers in Europe have been steady around the $1,270/tonne (€978/tonne) level throughout March, although with US numbers around the $4.10/gal level, buyers would be looking at prices in the low $1,200s/tonne to make any export business to the US viable.

“There is still some pitching for lower numbers,” said one producer. “Sellers are maintaining offers, however.”

One trader agreed, adding that European supply was currently balanced.

“There is no US option or arbitrage,” the trader said. “We haven’t seen any fire sale, so the market is quiet right now.”

($1 = €0.77)

By: Truong Mellor
+44 208 652 3214

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