– China’s VAT cut prompts wait-and-see approach
– Domestic East China price falls Yuan 15/mt
Asian toluene slipped $1/mt from last Friday to be assessed at $647/mt FOB Korea and $690/mt CFR China Monday, tracking domestic East China ex-tank prompt discussions lower in thin trade. No firm bids or offers were heard throughout the day Monday as most market participants adopted a wait-and-see approach to gauge the impact of the Chinese government’s latest move to lower VAT in a bid to spur consumption. “Toluene arrival to China has been lower recently,” a toluene end-user in China said. The East China domestic prompt ex-tank toluene price was heard discussed at around Yuan 5,375/mt early in the day before falling to Yuan 5,360/mt towards the end of the day. The East China domestic marker was assessed at that level, equating to $662/mt on an import parity basis, down Yuan 15/mt from last Friday. “In April the prompt domestic price will be close to Yuan 5,600/mt in my personal view,” a market source in China said. “We were seeing H2 April being discussed at Yuan 5,400/mt this morning, there isn’t a lot of supply globally, downstream consumption is also good — unless plants have enough inventories, I would say prices will continue to rise in China,” another source in China said Monday.
Toluene was assessed down $1/mt from last Friday at $647/mt FOB Korea Monday in thin trade. The CFR China marker was assessed at $690/mt, also down $1/mt from Friday, tracking the domestic East China market lower in thin trade. The FOB Korea and CFR China markers take the average of the third and fourth half-month laycans, currently H2 April and H1 May. The H2 April and H1 May laycans were each assessed at $690/mt CFR China, retaining the flat price structure from Friday.