06 January 2014 15:42 [Source: ICIS news]
LONDON (ICIS)--European toluene contracts for January have been confirmed within a range of $1,110-1,112/tonne (€821-823/tonne), down $18-20/tonne from the previous month, as initial settlements heard late last week received further support from players on Monday.
One buyer confirmed on Friday 3 January that it had agreed an initial settlement for January volumes at $1,110/tonne then later confirmed it had settled other contracts at $1,112/tonne.
Other suppliers confirmed earlier today that they had agreed January contracts at $1,110/tonne and $1,112/tonne, and a major European buyer also said it had finalised January business at $1,110/tonne.
The contracts were agreed on a FOB northwest Europe (NWE) basis.
With the Asian spot market still priced comfortably above $1,150/tonne on a FOB Korea basis, and a clear contango emerging into March, this leaves European cargo more attractive to buyers in markets such as India and the Middle East.
While there was no clear pattern for the upcoming month yet to emerge, sources believed that a continued lack of liquidity in the European market would plague price discussions.
There was talk of toluene spot deals as high as $1,140/tonne early in December, with the numbers buoyed by supply concerns in the aftermath of the explosion at Total’s Antwerp site. Several sources reported spot deals within a range of $1,100-1,130/tonne FOB towards the end of the month, with the last being a 2,500 tonne deal for export to South Africa at $1,118/tonne.
“It is always a challenge to find European material,” said one supplier, adding that the potential for cracker outages could keep domestic availability limited.
Other sources pointed to weak demand from the gasoline blending sector, where gasoline prices around the $920/tonne FOB mark were keeping blend economics unworkable so far this month.
($1 = €0.74)
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