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 Q2 2016
US Gulf toluene spot values were trending higher late in the first quarter partly on higher octane demand. Toluene is a preferred octane booster for summer fuels, which need to be less volatile than winter grades. The US summer fuels season runs from May through to mid-September, with fuel blenders switching to summer blends as early as March. As the season gets further underway in the second quarter, octane demand is expected to increase and toluene prices are expected to rise.
European toluene prices are firming into the second quarter alongside higher gasoline prices and the switch to summer grade specifications. Exports of toluene out of the EU have seen sustained year on year growth since October 2015, and this is expected to continue as 2016 unfolds. The key driver for European toluene demand is the gasoline blending sector in regions such as West Africa and Asia, where octane boosting consumption of reformate and mixed aromatics is growing in tandem with the rise in automotive usage.
Asia toluene prices could receive some support in the May-June period when there are several turnarounds expected in the key northeast Asia markets. The peak season for agricultural and pharmaceutical downstream sectors could also support demand to some extent in the near term. Gasoline demand could also see an improvement in the hotter season forthe northern hemisphere, improving toluene demand as a result. However, price increases could be capped by the limited buying appetite in China and India, as buyers there committed to quantities in March-April that were greater than domestic demand.
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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.