Stabilizing crude oil prices and a resulting sentiment that the European toluene market might have hit a bottom have triggered renewed buy interest in toluene molecules from the chemical sector, sources said last week.
“There is a bit of a restocking in the distribution now. Everyone seems to have come to a conclusion that the market has already touched the bottom,” a European distributor said.
Several sources also mentioned recent demand for toluene into the toluene diisocyanate sector, with trades heard done at $530-535/mt range FOB ARA.
Toluene prices rebounded $26/mt on the day to $530/mt FOB ARA Wednesday, up from a six-year low of $495/mt last week.
CE front-month Brent crude futures closed at $48.61/b at 16:30 London time Wednesday, just $0.15/b down on the day.
Over the past several months the steady fall of the toluene prices has deterred incremental demand, with the gasoline blending pool being the only outlet for spot tons.
Blenders continue to buy toluene to mix into gasoline which is then shipped out of the region, with bids still heard at $75/mt over gasoline.
Eurobob gasoline was last assessed at $446/mt FOB ARA, though February swaps were at $450/mt as the market is in contango.
