Toluene Prices, markets & analysis
With a network of price reporters across Asia, Europe and the US, ICIS is fully equipped to keep you updated on everything that happens in the global Toluene market, whether you buy or sell Toluene or related products.
From daily and weekly reports containing price assessments obtained by our network of local reporters, to the news and analysis that put the market into focus, we provide the tools you need to make confident business decisions.
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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 2014
With the recent spike in US toluene pricing starting to ease in July amid better availability, European players are struggling to determine what will drive the market in the third quarter.
Despite a clear arbitrage, especially towards the end of June, sources agreed that very little material moved from Europe to the US. Mostly this was due to limited extraction rates earlier in the year keeping spot availability balanced-to-tight, but there were also concerns surrounding the sustainability of the upturn in the US market.
European spot levels are still largely taking their cues from the US market, as some sources said price ideas are likely to come down.
US prices may come down in the third quarter as the summer driving season draws to a close.
However, the US hurricane season will still be in full swing, and could still impact the market.
Toluene spot prices in Asia market likely to slip into second half of July, if downstream paraxylene (PX) margins get squeezed by the slew of new PX units to come on stream in H2 July. In addition, the ongoing lull season in the third quarter for the solvent sector reduced Asian importers appetite to buy more cargoes.
However, fundamentally short South Korean origins for August cargoes, which were similar for July supplies, will prevent large price fall on FOB Korea basis. Moreover, if the US gasoline demand prevails, FOB Korea pricing in Asia will be buoyed by the firmer US numbers.
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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.