A supply glut in China continued to put pressure on prices
Monday. East China inventories rose 11.43% week on week to 78,000 mt, while
South China inventories fell by 6.25% to 15,000 mt. The increase in inventory
levels ahead of the Lunar New Year holidays at the end of the month prompted
sellers to lower their sell indications in the domestic market in a bid to
reduce stocks.
A prompt deal was heard done at Yuan 5,690/mt in the afternoon. The domestic price of 99.5% purity toluene was assessed down Yuan 30/mt day on day at Yuan 5,690/mt, or $677.47/mt on an import parity basis, Monday. On a CFR China basis, deals were heard done at $708/mt and $715/mt earlier in the week, but these could not be confirmed. The CFR China marker was assessed at $706/mt, down $4/mt day on day Monday, amid lower selling indications. In the FOB Korea market, bids for March cargoes were heard at $705/mt FOB Korea, while for April they were at $705-$710/mt FOB Korea in the afternoon. Elsewhere in Asia, sources said that inventories were balanced in the Taiwan market with the bulk of requirements met by domestic cargoes.
An offer for an H1 March cargo at $730/mt FOB Taiwan was heard earlier in the week, but attracted no buying interest. Buying interest was heard at above $725/mt CFR Taiwan levels but there were no offers at this level. The CFR Taiwan marker was assessed at $728/mt, up $8/mt week on week. Taiwan's CPC issued a sell tender for 3,000 mt to be loaded any time in February, market sources said. The tender closed Wednesday and was heard awarded at a high premium to the FOB Korea marker, though this could not be confirmed.
In the Southeast Asia market, spot supply was tighter amid a planned maintenance at Thailand's IRPC and Malaysia's Lotte Titan in February, market sources said. However, demand remained stable. The FOB Southeast Asia marker was assessed at $705/mt, stable week on week while the CFR Southeast Asia marker was also unchanged from the previous week at $730/mt CFR. The CFR India marker was also flat week on week at $755/mt. March ICE Brent crude rose 64 cents/b from Friday to $55.99/b at 0830 GMT Asian close Monday.
RATIONALE: Asian toluene was assessed at $699/mt FOB Korea Monday, unchanged day on day. The marker takes the average of the third and fourth half-month laycans, currently H1 February and H2 February. Offscreen during the Market on Close process, a bid for a March cargo was heard at $705/mt FOB Korea against an offer at $714/mt FOB Korea. March was assessed at $706/mt FOB Korea within the bid and offer. February was assessed at $699/mt FOB Korea, unchanged day on day, in the absence of bids and offers. A February offer was heard at $707/mt CFR China. The CFR China marker was assessed at $706/mt, below the offer.
European spot price of toluene assessed up The European spot price of toluene for loading 5-30 days forward was assessed at $676/mt FOB ARA, stable on the day and up $0.50/mt on the week. The most recent assessments in Asia and the US also showed stable prices. No deals were heard done on Monday, but market fundamentals in the Antwerp-Rotterdam-Amsterdam area remain firm with very low volumes of spot material available, due to a considerable volume of exports in recent weeks and constrained resupply because of low water levels on the Rhine.
One market source reported a trade for 2,000 mt on Wednesday this week at $134/mt premium to the January Eurobob gasoline swap, in line with levels assessed on Friday. Buying interest was reported earlier in the week at an outright price of $675/mt for any-January loading. At the time of the bid, it was equal to a $132.75/mt premium to January Eurobob gasoline. Downstream, the benzene spot price was assessed at $952/mt CIF ARA, down $8.50/mt on the day but up $49/mt on the week, putting benzene's premium to toluene at $276/mt. As a result of surging benzene earlier this week, on purpose toluene-to-benzene conversion economics -- such as hydrodealkylization (HDA) -- were boosted and benzene's premium to toluene hit $342.50/mt on Tuesday, the highest since October 23, 2014.
RATIONALE: Assessments of toluene for loading 5-30 days forward at $676/mt FOB ARA, stable on the day, in line with stable prices in other regions. No information was reported on Monday that was deemed to have disproven the previous assessment. TDI grade and nitration grade toluene were assessed at parity.
A prompt deal was heard done at Yuan 5,690/mt in the afternoon. The domestic price of 99.5% purity toluene was assessed down Yuan 30/mt day on day at Yuan 5,690/mt, or $677.47/mt on an import parity basis, Monday. On a CFR China basis, deals were heard done at $708/mt and $715/mt earlier in the week, but these could not be confirmed. The CFR China marker was assessed at $706/mt, down $4/mt day on day Monday, amid lower selling indications. In the FOB Korea market, bids for March cargoes were heard at $705/mt FOB Korea, while for April they were at $705-$710/mt FOB Korea in the afternoon. Elsewhere in Asia, sources said that inventories were balanced in the Taiwan market with the bulk of requirements met by domestic cargoes.
An offer for an H1 March cargo at $730/mt FOB Taiwan was heard earlier in the week, but attracted no buying interest. Buying interest was heard at above $725/mt CFR Taiwan levels but there were no offers at this level. The CFR Taiwan marker was assessed at $728/mt, up $8/mt week on week. Taiwan's CPC issued a sell tender for 3,000 mt to be loaded any time in February, market sources said. The tender closed Wednesday and was heard awarded at a high premium to the FOB Korea marker, though this could not be confirmed.
In the Southeast Asia market, spot supply was tighter amid a planned maintenance at Thailand's IRPC and Malaysia's Lotte Titan in February, market sources said. However, demand remained stable. The FOB Southeast Asia marker was assessed at $705/mt, stable week on week while the CFR Southeast Asia marker was also unchanged from the previous week at $730/mt CFR. The CFR India marker was also flat week on week at $755/mt. March ICE Brent crude rose 64 cents/b from Friday to $55.99/b at 0830 GMT Asian close Monday.
RATIONALE: Asian toluene was assessed at $699/mt FOB Korea Monday, unchanged day on day. The marker takes the average of the third and fourth half-month laycans, currently H1 February and H2 February. Offscreen during the Market on Close process, a bid for a March cargo was heard at $705/mt FOB Korea against an offer at $714/mt FOB Korea. March was assessed at $706/mt FOB Korea within the bid and offer. February was assessed at $699/mt FOB Korea, unchanged day on day, in the absence of bids and offers. A February offer was heard at $707/mt CFR China. The CFR China marker was assessed at $706/mt, below the offer.
European spot price of toluene assessed up The European spot price of toluene for loading 5-30 days forward was assessed at $676/mt FOB ARA, stable on the day and up $0.50/mt on the week. The most recent assessments in Asia and the US also showed stable prices. No deals were heard done on Monday, but market fundamentals in the Antwerp-Rotterdam-Amsterdam area remain firm with very low volumes of spot material available, due to a considerable volume of exports in recent weeks and constrained resupply because of low water levels on the Rhine.
One market source reported a trade for 2,000 mt on Wednesday this week at $134/mt premium to the January Eurobob gasoline swap, in line with levels assessed on Friday. Buying interest was reported earlier in the week at an outright price of $675/mt for any-January loading. At the time of the bid, it was equal to a $132.75/mt premium to January Eurobob gasoline. Downstream, the benzene spot price was assessed at $952/mt CIF ARA, down $8.50/mt on the day but up $49/mt on the week, putting benzene's premium to toluene at $276/mt. As a result of surging benzene earlier this week, on purpose toluene-to-benzene conversion economics -- such as hydrodealkylization (HDA) -- were boosted and benzene's premium to toluene hit $342.50/mt on Tuesday, the highest since October 23, 2014.
RATIONALE: Assessments of toluene for loading 5-30 days forward at $676/mt FOB ARA, stable on the day, in line with stable prices in other regions. No information was reported on Monday that was deemed to have disproven the previous assessment. TDI grade and nitration grade toluene were assessed at parity.
