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.
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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 Q4 2014
The price upside in Asia for spot parcels is likely be capped in Q4 by the large declines seen in the downstream paraxylene (PX) and benzene markets, considering the already squeezed toluene disproportionation (TDP) margins. The market was hopeful for the return of Chinese demand after the National Day holiday, which may lend support to prices, amid few spot cargoes, especially for South Korean origins, after the start-up of the Ulsan Aromatics’ TDP and PX unit in South Korea in early June.
The toluene market has come down over the third quarter on the back of weak demand and ample supply. The market had been lacklustre for much of the US summer driving season alongside weak demand. However, alternative blendstocks, such as reformate, have been trading at more competitive and lower levels compared with the toluene and mixed xylene markets. Prices have been stronger moving into early Q4 because of stronger blending demand, but sources said they do not expect this to last long. Sources expect most of the fourth quarter to see weak demand, coming alongside expected weakness in US energy.
There is no clear sense of direction for Q4 in Europe so far, with limited downstream demand ahead of year-end destocking and oil/energy weakness weighing on October pricing. The sharp drop for Brent and naphtha futures has also pulled benzene prices lower, limiting any demand for toluene from hydrodealkylation production at current spot levels.
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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.