Asian Toluene: Rises $11/mt on thin trading

– Domestic East China ex-tank price rises

– Stable downstream TDI market in East China

Asian toluene rose $11/mt from Tuesday to be assessed at $605/mt FOB Korea and $636/mt CFR China, largely tracking the East China marker amid thin trading. Before the   Market on Close assessment process Tuesday, a bid for a 2,000-mt cargo was heard at $630/mt CFR China for any March delivery, with a bid and offer for a 2,000-mt second-half March loading cargo also heard at $605/mt FOB Korea and $622/mt FOB Korea, respectively. No bids or offers were seen during the   Market on Close Tuesday, despite the surge in upstream crude over the weekend, as participants stayed on the sidelines keeping a watch on prices. Price discussions for ex-tank prompt cargoes in the domestic East China market were heard at the Yuan 5,000/mt-Yuan 5,080/mt range earlier during the day, and rose to Yuan 5,060/mt-Yuan 5,070/mt towards the end of the day. The East China marker was assessed at Yuan 5,065/mt, converting to an import parity of about $632/mt Tuesday. Meanwhile, toluene end-users in China were mostly heard to have returned to the market on Tuesday. Downstream toluene di-isocyanate, also known as TDI, was heard traded at about Yuan 14,000/mt on Tuesday in East China. “The TDI market has been stable since after the Chinese New Year holidays,” a toluene end-user said Tuesday.

RATIONALE:

The FOB Korea toluene marker was assessed at $605/mt FOB Korea Tuesday, up $11/mt from Tuesday, largely tracking the CFR China marker amid thin trading. The marker takes the average of the third and fourth half-month laycans, currently H2 March and H1 April. The CFR China marker was assessed at $636/mt Tuesday, also up $11/mt on the day, tracking the domestic East China marker. No transparent bids or offers were seen during the   MOC process. The H1 March and H2 March laycans were assessed at $636/mt CFR China Tuesday, maintaining a flat market structure from Tuesday.

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