NWE Toluene – Buying interest pushes May premium up

– May premium rises $13/mt

– Arbitrage still unworkable

The May premium for European toluene picked up on Wednesday, as Total registered buying interest for the month through the  Market on Close assessment process. The May premium increased to $99/mt over Eurobob gasoline, up $13/mt from Wednesday. the April premium was stable at $86/mt, with no sign of reduced availability at the front end of the market and no signs of demand. Production of toluene had been reduced, a distributor said, but it was hard to notice because of material inbound from the Mediterranean. On paper, the arbitrage to the US showed a potential gross profit of over $40/mt. In reality, the US market has been quiet due to logistical issues affecting the Houston Ship Channel.

RATIONALE:

S&P Global  assessed the CIF ARA toluene premium over Eurobob gasoline at $86/mt for April on Wednesday, stable from Wednesday. The May premium was assessed at $99/mt, up $13. An outstanding bid was left during the  Market on Close assessment process at $98/mt for May 10-20 delivery by Total.

 

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