02 August 2013 11:32 [Source: ICIS news]
LONDON (ICIS)--August European toluene contracts have been confirmed at $1,110-1,115/tonne, buyers and sellers confirmed on Friday, up by $67.50/tonne from last month’s range on firm spot indications and upward pressure from the US market.
Two consumers confirmed that they had agreed August contracts at $1,110/tonne (€844/tonne) late on Wednesday 31 July. One producer later confirmed that it had settled August at the same number.
On Friday, a second supplier said it had agreed August contracts at $1,115/tonne with two of its customers, but had gone to fallback elsewhere.
Contracts were settled on a free on board (FOB) northwest Europe (NWE) basis.
July saw European spot numbers creep up as gasoline values pushed well above $1,000/tonne FOB AR (Amsterdam-Rotterdam) on firm crude oil futures, which subsequently brought gasoline blenders into the toluene market as the spread between the two products widened and the economics became workable.
July spot deals were done as high as $1,097.50/tonne on an FOB basis before gasoline eased back below the $1,000/tonne mark, although oil and gasoline numbers rose again by 1 August, with gasoline trading as high as $1,023/tonne FOB AR.
Firming US toluene prices have also kept some upward pressure on the European market. Traders pushed the bid/offer range up above $1,100/tonne.
Firm oil and energy numbers through July, and healthy polyurethane (PU) demand has kept US spot numbers around the $1,170/tonne level.
“Traders were looking to either buy at $1,110/tonne to bulk up export parcels to the US, or sell volumes at $1,130/tonne,” one producer explained.
“With numbers in the US around $1,170/tonne and $55/tonne freight costs, sellers are happy to keep offers high or either export the material themselves,” explained one trader earlier this week.
“On paper, the market is high,” said one seller, but remained unsure as to whether any significant volumes were leaving Europe for the US so far.
The European toluene market has seen year-on-year rises in exports so far in 2013, amid slow offtake and bearish pricing, as suppliers have sought to keep domestic availability balanced.
($1 = €0.76)
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