LONDON (ICIS)--European toluene and mixed xylenes (MX) spot prices crashed to 14- and 15-year lows last week, dragged by Eurobob gasoline dropping well below $200/tonne as coronavirus travel restrictions weakened petrol use and crude oil demand.
On Friday (27 march), the International Energy Agency (IEA) forecast crude demand could fall as much as 20% over the coming months due to coronavirus.
Values for the sister products toluene and MX remain well below lows hit during the 2008 slump - and the lowest since the toluene and MX's assessments began in 2006 and 2005, respectively.
Toluene was also pressured by a well-supplied market set to become lengthier, prompting premiums over gasoline to plunge in some instances, assessed at $60-110/tonne.
MX fared slightly differently, with supply slightly harder to find, which supported premiums over gasoline up to around $100-110/tonne.
European truck prices are mainly stable for the time being, with suppliers due to share new monthly prices in the week to come.
Trucks have been below €600/tonne in cases or slightly above on a delivered basis in others. On a FCA (free carrier) basis, they are at the mid-€500s/tonne.
Truck activity remains quiet as the distribution market fields enquiries for other products, such as isopropanol (IPA) and ethanol due to rising demand for hand sanitizer.
Volatility in upstream pricing is challenging for traders checking global arbitrages daily for potential openings.
US arbitrage appears closed for toluene, limiting any outflows from Europe other than a possible structural or internal move for one producer, trading feedback suggests.
Asia is also not pulling either, despite being a high-priced region, since it should be well-catered to by local stocks.
Lengthy supply for toluene is a possibility for April as stable-to-soft chemical demand amid the uncertain economic environment could be amplified by the closure of BASF’s smaller toluene diisocyanate (TDI) plant in April, which could free up toluene in the German market.
Bulk prices for toluene dropped to $205-315/tonne and MX was down to $245-315/tonne, with these weekly ranges to Friday 27 March both on a FOB (free on board) Rotterdam basis.
The main chemical use of toluene is to make benzene and xylenes. The product is also used as a solvent in paint thinners, nail polish remover and in the manufacturing of nylon and plastic bottles.
MX is a feedstock for paraxylene (PX) and orthoxylene (OX) production, while the solvent grade is a raw material for dye, organic pigment, perfume and medicines, as well as a general solvent for paint and agricultural pesticides.
Front page picture: Planes grounded at
Frankfurt airport; the European aviation
industry has come to standstill amid travel
Source: Thorsten Wagner/EPA-EFE/Shutterstock