The Toluene markets are covered by ICIS weekly in Asia, Europe and the US, while a daily report is also available for Asia. This reliable and trustworthy tool allows you to stay up-to-date with news and analysis and gives you the confidence to make vital commercial decisions.
Price assessments cover spot activity over the week as well as at close of business and contract prices are also published in Europe. This market intelligence is compiled by our locally-based reporters and commentary includes news on deals taking place, feedstock movements, demand and supply trends, outlooks, regional focus as well as graphs.
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Toluene overview Transcript
Toluene is a basic chemical and a feedstock for a wide range of applications.
Toluene is used primarily as a solvent for paints, coatings and cleaners in China, Southeast Asia and India. It is also used widely in this region for the production of toluene diisocyanate or TDI.
Toluene’s use is key in the production of benzene and mixed xylenes via toluene disproportionation or TDP, and hydro dealkylation or HAD, which make up about 20% of Asia’s aromatics production.
The use of toluene as a blendstock for gasoline blending is a key emerging segment in Asia. It started with the US, where MTBE was banned from the gasoline pool resulting in the increased use of toluene as an octane booster. In Asia toluene’s consumption for gasoline blending is increasing rapidly, especially in countries like China, which is expected to soon become the world’s largest car market.
Toluene is produced from the catalytic reforming of naphtha and from pyrolysis gasoline coproduced in the steam cracking of liquid feedstocks.
Not surprisingly China is the largest importer in Asia. It imports between 50,000 and 70,000 tonnes of toluene every month. But regional exporters are facing stiff competition following capacity additions by local giants like Sinopec, hence toluene exporters in Asia are increasingly turning towards India. India is seen as the next most rapidly growing market with estimated growth at about 7 to 8% per year.
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Toluene: Market overview
Updated to Q3 2016
European toluene demand should see an upturn in Q3 this year with the summer driving season supporting consumption of mixed aromatics from the gasoline blending sector. However, stocks have been built up in anticipation of this, which is keeping downward pressure on gasoline prices so far in July.
US Gulf toluene spot prices gained ground in the second quarter owing to healthy octane demand during the summer driving season as well as steady demand for use as a chemical feedstock, although sufficient supply for the product limited the extent of price gains. Looking ahead to the third quarter, downstream derivatives such as benzene are expected to see sharp price hikes while demand for toluene as an octane component in fuels will begin to trail off towards the end of the third quarter as the summer driving season draws to a close.
Demand-supply fundamentals in Asia are expected to remain bleak until the August period in third quarter of 2016. Ample inventories in both China and India could hamper import buying activities from traders or distributors, according to several market players. There are hopes that demand will only pick up after August, when buyers start replenishing their stocks. Healthy TDP and TDI spreads in northeast Asia will provide a price floor for Asia toluene. Toluene is unlikely to be placed into Asia’s gasoline blending pool, as there are other more competitively-priced blendstocks.
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Toluene is a colourless, mobile liquid with a characteristic sweet, pungent, benzene-like odour. It is an irritant to the eyes, skin, nose and lungs. Toluene is a dangerous fire hazard and can lead to a flashback due to its heavy vapour.
The main chemical use of toluene is to make benzene and xylenes using a number of technologies.
Toluene is also used in solvent applications and is consumed in the manufacture of toluene diisocyanate (TDI) which is used in the manufacture of polyurethane foams. Smaller uses for TDI include polyurethane elastomers and coatings.
Other minor chemical uses include the manufacture of phenol, caprolactam, nitrobenzene, benzoic acid and benzyl chloride.
In non-chemical uses, toluene is used in large quantities as an octane booster in gasoline but most of that portion remains in the refinery streams.
There are three grades of toluene: TDI grade of 99+% purity; nitration grade at 98.5-100%.
The original source of toluene from coke-oven gas has been replaced by the catalytic reforming of naphthas and from pyrolysis gasoline co-produced in the steam cracking of liquid feedstocks. A very small amount is still produced from light oil formed by the carbonisation of coal.