27 November 2013 11:35 [Source: ICIS news]
LONDON (ICIS)--Global bullishness and some buying interest from other regions are likely to support an upturn in European toluene contracts for December, sources said on Wednesday.
Following the settlement of November contracts at $1,020-1,025/tonne (€755-759/tonne) on a free on board (FOB) basis, European spot numbers saw some gains in line with higher US pricing.
There were two spot deals done at $1,060/tonne amid balanced availability in Europe, and one supplier noted that there had been renewed buying interest from abroad for European product.
Another trader agreed, citing demand from India and the Middle East, regions that are normally supplied by the Asian market. However, prices moving as high as $1,170/tonne on a CFR (cost and freight) basis on firm Chinese buying interest has made European cargo more attractive for buyers from these markets.
European spot prices closed in on the $1,100/tonne mark towards the end of November, with talk of a deal done at $1,090/tonne last week, although this was so far unconfirmed.
The relative liquidity in Europe this month is surprising in light of several ongoing cracker outages in Europe, which would in theory have kept pyrolysis gasoline (pygas) and BTX availability restricted.
There was talk of one European supplier declaring force majeure on toluene last week, but this was unconfirmed at the source. Combined with the explosion at Total’s petrochemicals site in Antwerp, this has kept some uncertainty around aromatics supply levels for the rest of the fourth quarter.
Additionally, offers for material in the US market reaching $4.00/gal in November mean that there is still some headroom for European numbers to move up further.
“The November contracts were settled on the low side,” one supplier said earlier this month. “We started to see the upturn early in the month but by then some initial contracts were being agreed.”
Despite the current upward sentiment, however, many players remains cautious of any sizeable increase in December for what will be a short month owing to the holiday season. Demand for Asian toluene from the Chinese blending sector will also be curtailed next month, which is likely to see pricing across the region ease off.
($1 = €0.74)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections