Singapore — Asia toluene prices surpassed a four-year high Thursday on higher crude oil futures, strong margins and plant turnarounds, market sources said Friday.
The FOB Korea marker for toluene was assessed Thursday at $814.50/mt, its highest spot price since January 27, 2014, when it was assessed at the same level, according to S&P Global Platts data.
Trading sources said the market has primarily drawn support from an overall stronger oil complex. Front-month October ICE Brent crude futures closed Thursday in Asia at $77.37/b, a three-week high.
"It makes sense for toluene to keep increasing with where crude and naphtha are," one trader said.
Demand for toluene as a feedstock, in the production of petrochemical products such as isomer-grade mixed xylenes, has helped to boost prices, traders said. The price spread between FOB Korea toluene and isomer-MX peaked August 23 at $161/mt, its highest level since September 5, 2013.
Traders also pointed to planned turnarounds in South Korea over the next few months as a reason buying interest has mainly focused on October supply.
Yeochun NCC, Lotte Chemical and LG Chem all have upcoming maintenance on aromatic units, which could take as much as 276,000 mt/year of toluene production offline, Platts previously reported.
CFR China toluene prices have risen in tandem with the FOB Korea market, keeping the arbitrage between the regions unprofitable. The price spread between the regions was $20.50/mt Thursday, not enough to cover shipping costs.
"China is mostly staying out of the import market," a second trader said. "There might be some import inquiry, but only for one or two days for very prompt supply."
