Europe April toluene fully confirmed at $1,170-1,175/tonne

23 April 2013 13:10  [Source: ICIS news]

LONDON (ICIS)--European toluene contracts for April have been fully confirmed at $1,170-1,175/tonne (€901-905/tonne) FOB (free on board) northwest Europe (NWE), down $95-100/tonne from the previous month’s range following a third supplier’s settlement with a customer at $1,170/tonne.

Two pairs of buyers and sellers had previously confirmed that they had settled April volumes at $1,175/tonne.

The European market had been subdued throughout March, although balanced supply levels had helped domestic prices resist the sharp slump seen in Asia.

Spot numbers in Europe have subsequently come down in April amid continued slow demand, with some aggressive offers seen on a cost, insurance and freight (CIF) basis.

Offers were initially heard at the start of the month around the contract level price before coming down to $1,150/tonne CIF. There was later talk of deals done at $1,100/tonne and $1,125/tonne on a CIF basis but these were not confirmed.

The sharp drop in crude futures has also helped bring European spot levels down in April. One seller felt that $1,100/tonne was too low, even on a CIF basis, it nonetheless conceded that the plunge in Brent futures must be weighing down on toluene price ideas.

Suppliers largely agree that there was no incentive for them to bring down offers, however, as there is no demand outside of contract. With the US Gulf market still trading below $4.00/gal, there is no workable arbitrage from Europe into the region.

Spot numbers would have to be below $1,100/tonne to make any export business workable to either the US or Asia, and several players felt that the netback is not a good indication of where European prices should be assessed.

($1 = €0.77)

By: Truong Mellor
+44 208 652 3214

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