Fundamentals remain tight in Europe

European toluene started the week with fundamentals unchanged. The market entered a tight supply environment in January, as production issues in Europe followed the seasonal malaise over the winter holidays. The production difficulties in question for toluene are expected to be resolved by the end of the month, according to sources. Arbitrage opportunities for the toluene market remained shut at the end of last week, with European pricing higher than forward dates seen in the US and in Asia. The Asian market slipped $12/mt on Tuesday to $595/mt FOB Korea and $629/mt CFR China. End-users were in no rush to buy toluene or MX, sources said, as factories were yet to restart following the Lunar New Year holidays. Downstream plastics demand has been a demand-booster globally for toluene, with paraxylene margins through disproportionation of toluene consistently positive. This spread was last seen at $306/mt in Europe on Tuesday. Increased demand was seen in the US on Tuesday, with prices up by 4 cents to 221 cents/gal (around $682/mt). Supply in the US market was also described as tight, matching Europe.


S&P Global CSG assessed the CIF ARA toluene premium over Eurobob gasolineat $185/mt for February on Tuesday, stable from Tuesday. A trader indicated that the market was unchanged, with outright prices in a range of $690-$700/mt. Movement in Eurobob barge swaps for February did not disprove the premium. The March premium was assessed at $182.75/mt, stable from Tuesday with no disproving indications.

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