Europe toluene holding steady despite limited blending interest

21 April 2017 14:10 Source:ICIS News

LONDON (ICIS)--European toluene spot prices have largely remained steady, sources said on Friday, as the numbers track gasoline movements.

Eurobob gasoline barge prices have declined from last week in line with upstream ICE Brent crude oil futures, with prices dipping below $550/tonne late on Thursday 20 April.

Premiums for toluene over the Eurobob average have so far held steady around the $80-90/tonne level, and there were some industry players seen bidding above $100/tonne.

However, other players in the toluene market were puzzled at the strong premiums given the current demand landscape. Blending demand for toluene and other components continued to weaken, with the news that the Chinese government may introduce a consumption tax on oil by-products next month.

As a result of this, demand for mixed aromatics has waned as players wait to see what the impact will be.

"There aren't any bids," said one industry source. "Nobody wants to touch it."

Premiums over gasoline for reformates and toluene/xylene (TX) streams have crashed, with sources reporting numbers as low as $10-15/tonne over the Eurobob price because of severely limited demand.

One source in the toluene market said that while benzene prices have started to recover this week, hydrodealkylation (HDA) production economics were still only workable for toluene with premiums over Eurobob around the $60/tonne level.

By Truong Mellor