26 March 2013 08:22 [Source: ICIS news]
SINGAPORE (ICIS)--India is expected to receive fewer contracted volumes of toluene in April on the back of mounting stock levels in the country, market players said on Tuesday.
Market players estimated that the inventory levels for toluene across India have peaked at 45,000 tonnes, compared with a typical level of 10,000-20,000 tonnes in both Mumbai and Kandla.
India has contracted 28,000 tonnes of South Korean and Singapore-origin cargoes for each month in 2013, despite requiring only around 20,000 tonnes of toluene imports every month, according to the market players.
“About 10,000 tonnes of South Korea-origin [cargoes] will not be delivered in April,” a South Korean trader said.
“The [Singapore supplier] will skip April shipment,” a major Indian importer said.
The continuous influx of large contracted volumes over the past three months have saddled India with a surplus of toluene stocks.
“The country is flooded with toluene now. We can’t have more volumes coming in now,” another Indian importer said.
The lifting of toluene cargoes from the Indian ports has been slow, because of weak demand from the downstream solvent sectors, market players added.
The oversupply has triggered a downtrend, where domestic prices fell to a nine-month low of Indian rupees (Rs) 63.50-64.50/kg ($1.17-1.19/kg) ex-tank on 22 March.
Consequently, Indian traders have sought to collectively raise their offer levels in a bid to prevent further erosion in their margins.
On 23 March evening, prices rose to Rs66.00/kg ex-tank, while on 26 March midday discussion levels were at around Rs68.00/kg ex-tank.
“Whether this reduction in contract-volume delivery will continue in May, we are still unsure,” a third Indian importer said.
($1 = Rs54.19)
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