06 September 2013 08:08 [Source: ICIS news]
SINGAPORE (ICIS)--Spot toluene domestic prices in India dipped from a one-year high late on Thursday, on the back of the strengthening of the local rupee currency, but at the same time, importers are keen to book new shipments as the arbitrage window opens, market players said.
Late on 5 September, cargoes were discussed at Indian rupees (Rs) 87.00/kg ($1.32/kg) ex-tank in Kandla, and parcels were negotiated at Rs88.00/kg ex-tank in Mumbai, lower compared with the one-year high of Rs87.50-88.50/kg ex-tank at the close on the previous day, according to ICIS.
The appreciation of the Indian rupee to around Rs66 against the US dollar on 5 September, after hitting lows of above Rs68 in the previous week, supported the drop, the market players said.
Spot domestic prices in India have been on the rise since end-May, when prices were at Rs65.00/kg ex-tank, following weakening in the Indian rupee which has depreciated by around 20% against the US dollar over the period.
An increase in the list prices of Rs7.00/kg to Rs82.00/kg EXW (ex-works) by the local producer Reliance Industries Ltd (RIL), with effect from 1 September, supported the bullish sentiment as well.
In addition, further declines in the Mumbai inventories to 5,000 tonnes from 6,000 tonnes in the previous week boosted local traders’ selling ideas, the players said.
However, the recent gains in spot domestic prices reopened import possibilities on the back of stable-to-firm FOB (free on board) Korea prices, they added.
Buying ideas for southeast Asian cargoes, exempt from import duty, were at $1,200-1,220/tonne (€912-927/tonne) CFR (cost & freight) India for October parcels, while spot FOB Korea prices were at $1,145-1,150/tonne on 6 September midday, a market player said.
“The price gap [between FOB Korea and CFR India] may just be sufficient to cover the freight for cargoes from South Korea, but buyers prefer to buy from southeast Asia because of duty advantage and shorter voyage time,” a Mumbai-based trader said.
($1 = €0.76, $1 = Rs65.67)
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