For the Quarter Ending March 2021
The supplies were tight during Q1 2021 as various plants remained shut for maintenance related work during the first half of the first quarter. During mid-February, freezing weather conditions disrupted the production lines in the US, which resulted in increased spot prices in the domestic market. The demand surged from the downstream sectors such as TDI and gasoline blending. However, hiked prices and supply disruptions aggravated the domestic buyers which turned more flexible towards the Asian supplies. FOB Texas Toluene prices were recorded at USD 910 per MT, showing a spike of 3% on month-on-month basis in March.
Toluene supplies surged in the north-eastern region, whereas supplies in southeast Asia remained balanced during the fourth quarter of 2021, as the addition of new capacities in China increased the production. However, major producers in the region turned to meeting the demand from the western hemisphere rather than southeast Asian countries for better netbacks in revenue. The demand in the APAC region remained stable to tight throughout the quarter. Constrained availability and resilient demand surged the FOB Korea price of Toluene to around USD 680/ton in March 2021.
During Q1 2021, Toluene supplies were balanced in the European region, as the consumption declined in the region due to imposition of fresh lockdowns, restricted mobility and restrained economic activity, leading to the downfall in demand. Due to minimal transporting activities consumption from the gasoline blending sector declined in the region. Surging spot prices of Toluene in the US, widened the arbitrage between US and Europe, hence the trading focus shifted towards the APAC suppliers.
For the Quarter Ending September 2020
Asian Toluene Market witnessed dented consumption against the backdrop of dull buying momentum amidst lackluster downstream demand as the market in various countries failed to regain the lost momentum after the outbreak of Coronavirus. High inventories of Toluene in China pressured local traders to channelize their material to the export market, thereby directing the supply to Southeast Asia. The situation eased with spate of maintenance turnarounds and resumption delays in several Northeast Asian plants in early September as producers undertook a wait and see approach amid fears of further loss in revenues due to volatile crude prices and market uncertainties. Prices of Toluene averaged around USD 637 per MT in the Southeast Asian market in the period between July to September.
Discussions in US Toluene market remained mixed amid global oversupply concerns from eastern countries in contrast to the forced turnarounds in several Toluene plant in US Gulf Coast due to the series of seasonal hurricanes. Although demand for Toluene witnessed a gradual pick up due to revival in the transportation industry, it was certainly not enough to recover the spreads with its downstream commodities. Reaching the plateau of the pandemic, several producers continued to reduce their operating rates while others relied on the export demand amid a prudent economy recovery.
Subdued downstream consumption coupled with muted spot activities dwindled the market fundamentals of Toluene in the European region. Producers already hurt by the squeezed profit margins reduced their operating rates in the second half of third quarter in order to balance the overwhelming supply. In addition, several turnarounds at downstream TDI plant further stalled the demand for the product in the region. The quarterly rise coming from favorable seasonal demand had insignificant impact on the petrochemical market struggling with the repercussions of the lockdown implemented in the previous quarter. Throwing light on the tumbling fundamentals, Northwest Europe’s petrochemical index registered a fall of around 5% for Toluene prices between July to August.