Updated to mid-November 2009
Asian market review by Sheau Ling Ong, ICIS pricing
Toluene spot prices in Asia saw a steady decline from mid-August at $795/tonne FOB (free on board) Korea to early October at $690/tonne FOB Korea, tracking crude and benzene values. However, toluene rebounded subsequently by 15% to $795/tonne FOB Korea in mid-November on the back of better market sentiment due to firmer energy values.
As the benzene-toluene spread narrowed to $10-15/tonne in October, producers of hydrodealkylation (HDA) and toluene disproportionation units (TDP) had either shut their facilities for the rest of the year or reduced operating rates to the minimum level. As a result, more spot availability emerged in the market in spite of production cutbacks in general for aromatic units. Chinese buyers said more Japanese sellers were heard offering in the China market as compared with the previous months.
The hike in Chinese gasoline prices has slightly boosted the buying interests of gasoline blenders. In the solvents sectors, players said markets remained slow upon entering the fourth quarter.
European market review by Truong Mellor, ICIS pricing
European September toluene contracts were assessed up $20-30/tonne at $775-780/tonne FOB NWE (northwest Europe), largely on the back of tightening supply caused by poor refinery economics. Spot levels had also climbed up due to restricted availability and higher gasoline prices.
However, the lack of any clear demand moving into the fourth-quarter brought spot levels down. Offers were heard but not met with any firm bids. October contracts were assessed down $45-47/tonne from the previous month.
As production rates began to increase, more material was being offered but demand remained soft. Sources largely expected prices to come down further towards the end of the year.
Stronger crude and energy values drove up November contracts, which were concluded at an increase of $40-42/tonne. However, sources felt that this upward movement was not a long term trend, as demand remained weak and supply continued to lengthen.
US market review by Landon Feller, ICIS pricing
Toluene prices in the US Gulf moved lower from mid-August to mid-October, bottoming out around $2.10/gal for nitration grade toluene (NGT) and $2.00/gal for commercial grade toluene (CGT) before moving up again in late October and early November.
Trading was very thin for CGT during the August to November period, while regular NGT deals were heard moving each week in relation to NYMEX gasoline and European export values.
Although the US Gulf hurricane season was quiet until mid-November, prices on NYMEX reformulated gasoline blend stock for oxygenate blending (RBOB) dropped temporarily below $1.70/gal following the conclusion of the traditional summer driving period. The devaluing trend did not last long before RBOB swung back to around $2.00/gal.
Reduced operating rates at US refineries and higher-priced toluene in Europe contributed to upward pricing in the fourth quarter.
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Toluene
Uses and Outlook
The main chemical use of toluene is to make benzene and xylenes using a number of technologies. In the hydrodealkylation (HDA) process, toluene and hydrogen are reacted to make benzene only. A toluene disproportionation (TDP) plant will convert toluene to benzene and xylenes while there are selective toluene disproportionation (STDP) processes that produce a paraxylene-rich stream. The transalkylation (TA) process takes toluene and C9 aromatics to produce xylenes.
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Toluene
Process Technologies
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 feeds. A very small amount is still produced from light oil formed by the carbonisation of coal while small quantities are recovered as a byproduct in styrene manufacture.
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