BERLIN (ICIS)--While European toluene sentiment and pricing has seen some recent erosion in line with lower aromatics numbers in the US, several players are expecting the market to stay balanced-to-tight next year, amid downstream toluene di-isocyanate (TDI) plants coming online.
“The two start-ups on TDI, as well as limitations on aromatics because of less naphtha cracking, will see a tighter market next year,” said one toluene supplier, speaking on the sidelines of the 47th annual European Petrochemical Association (EPCA) meeting in Berlin, Germany on Sunday.
Regarding the recent slump in US toluene pricing, the supplier felt that the market had become “overheated” amid fundamentally low summer demand. However, the increase in shale gas production throughout the US is expected to keep pressure on aromatics availability next year.
European toluene spot activity has been subdued throughout 2013, with some export business to the US and India, but an overall illiquid environment.
“It’s a delicate situation,” one trader said. “If you want to sell you have to look at the US and gasoline blending sector.”
However, the trader did not foresee the TDI start-ups having a sharp tightening effect on European availability.
“It will be more of a smooth transition,” the trader explained. “There is enough material in Europe right now.”
The EPCA meeting runs from 5-9 October.