Rising blend values this week were leaving US spot toluene at a discount for the first time since Aug. 29, and such discount should make the product attractive economically, sources said Thursday.
Spot toluene was assessed Wednesday at 371 cents/gal FOB USG for September, 0.63 cents/gal under the blend value. Meanwhile, the blend value rose nearly 14 cents since Friday, assessed Wednesday at 371.63 cents/gal.
Toluene was last seen at a discount Aug. 29, at 1.91 cents/gal under the blend value.
There were no September FOB USG bids by the market-on-close assessment window Wednesday, and the only offers were at 380 cents/gal for low-dioxane material.
No nitration-grade toluene bids, offers, or trades were heard.
Sources said Thursday the blend value is considered to be the price floor by the industry, so a discount to the blend value made toluene an attractive purchase.
That said, some market participants felt demand had been relatively weak in recent days.
"Toluene is the one with no action," a trader said.
The last reported toluene trades took place August 30 and August 31 at 380 cents/gal DDP USG for September, with Citgo selling both cargoes. Tauber bought the one on August 30, while Interchem was the buyer for the August 31 transaction.
Toluene's premium to regular unleaded 87 USG gasoline was at 79.23 cents/gal Wednesday, according to Platts data.
Sources said this premium was too costly to use toluene as a gasoline blendstock, as alkylate and reformate -- two competing blendstocks -- were assessed Wednesday at 32 cents/gal and 54 cents/gal, respectively.
By 11:30 AM CDT Thursday, October DDP USG offers were seen at 375 cents/gal, with no bids or trades heard, further illustrating weak demand for toluene.
