Toluene Chemical Industry was assessed higher by $4/mt, day on day

Chemical Industry

– China blending demand for MTBE higher

– China toluene downstream operation rates low

Toluene Chemical Industry was assessed higher by $4/mt, the day on day, at $714/mt FOB Korea, while the CFR China marker remained unchanged on Tuesday at $723/mt. Crude oil climbed firmly on Tuesday, with ICE Brent futures for June up by $2.15/b at $73.91/b, at the Singapore close at 4:30 pm local time. This drove strength in toluene on a FOB Korea basis, although there were no firm offers heard in the Chemical Industry on Tuesday. Low June bids for FOB Korea were heard in the $700-702/mt FOB Korea region. An Asian trader said that in Southeast Asia, blending demand was still robust with cargo sold for both May and June and blending margins were looking healthy. “Toluene being cheaper bits of help,” said the trader. A May selling idea for toluene was heard at $745/mt CFR Vietnam. Demand from within China was still not very healthy, said sources, although there were some mixed opinions, with some traders saying that there was gasoline blending demand coming from China, others strongly refuted this. Domestically, within China, toluene would not go into the blending pool right now, one trader said, since domestic China MTBE margins work out better than toluene Chemical Industry. Refineries within China would use MTBE due to better margins and turn towards toluene as a blendstock only once the MTBE blending limit is reached. Chinese domestic demand for gasoline is not as strong as gasoline demand in Southeast Asia right now, the trader added (Chemical Industry). Demand from Chinese downstream solvent manufacturers is currently quite low, said another source, due to low operation rates. Operation rates have been cut by downstream producers primarily because the Chinese government is conducting safety checks at various facilities, he added, and this is affecting overall demand from that sector. Although there was no outside confirmation, the source said that he expected demand from the Chinese downstream producers to remain low until September (Chemical Industry).

RATIONALE:

Toluene was assessed higher by $4/mt, the day on day, at $714/mt FOB Korea and unchanged at $723/mt CFR China on Tuesday. The markers take the average of the third and fourth half-month laycans, currently H2 May and H1 June. No bids or offers were registered during the Chemical Industry on Close assessment process. The CFR China marker was assessed above the highest June bid on Tuesday, heard at $722/mt CFR China. The East China domestic prompt price was lower day on day by Yuan 10/mt at Yuan 5,360/mt on Tuesday, with bid-offer heard between Yuan 5,350 and 5,380/mt. The FOB Korea Chemical Industry was assessed higher due to stronger crude oil prices and no disproving information.

Chemical Industry
Chemical Industry

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