LONDON (ICIS)--There were some higher numbers emerging in the European toluene market, sources said on Wednesday, in line with firmer crude oil and energy costs.
One source said it had completed a spot deal for toluene earlier this week at $660/tonne, which was around $90-95/tonne above the Eurobob price at the time. There were other bids for toluene heard as high as $100/tonne over Eurobob values for April.
The switch to summer specifications in the gasoline market earlier this month has helped push Eurobob pricing higher, with prices already reaching $575/tonne this week.
"Energy is the main driver," said one trader earlier today. "Demand from the blending components sector is actually a bit sluggish."
News of China’s plan to introduce a consumption tax on oil by-products could potentially have an adverse impact on demand for mixed aromatics, making European material less competitive.
Last year saw premiums for toluene over Eurobob gasoline soar as high as $170-190/tonne in the run-up to the US driving season, when fuel demand traditionally picks up.
The upward momentum has so far been less pronounced this year. One source noted that there were also lower premiums for reformates in the market this week, around $30-40/tonne over Eurobob numbers. This was weighing on pricing for other blending components.