SINGAPORE--Weak demand and high regional inventory, together with the recent fall in crude values, are expected to limit any near-term price recovery in Asian toluene prices, traders and producers said on Friday.
Prices have declined by a sharp $245-250/tonne from the $1,270/tonne FOB (free on board) Korea level seen on 1 July due to poor market fundamentals in Asia and the heavy fall in crude values from above $140/bbl.
Poor demand from China partly due to Olympics-related logistics and production restrictions had also brought imports to almost a standstill in the past two months.
The start-up of at least three new plants from June this year took a sizeable slice from the net demand for imports, said local traders. Most of them believed that a limited recovery of toluene import demand from China could be expected in the coming days.
Monthly imports for 2008 were estimated at about 20,000 tonnes, about 15,000-20,000 tonnes lower than the average monthly imports seen in 2007.
It s very difficult to find an outlet, said a Korean trader, echoing the sentiment of most traders and buyers in South Korea, Japan, southeast Asia and India who were heard holding high inventories which had been purchased above $1,200/tonne FOB or CFR (cost and freight) basis.
Stocks are high as nobody is willing to take spot or keep inventory, a Japanese trader said.
The steep price fall in toluene along with a slowdown in regional economies like China was drawing downstream demand in the region almost a standstill since August, said traders and distributors.
Buyers have lost money after having bought toluene at above $1,200/tonne CFR or $1,300/tonne CFR, and now the price is almost $200-300/tonne lower, said a southeast Asia-based buyer.
We are expecting an incoming toluene shipment of 3,000 tonnes which had been purchased at $1,300-1,310/tonne CFR towards end-July, added a Philippines-based buyer.
Hence, most buyers were heard waiting on the sidelines after having been caught with higher-priced cargoes.
On future market direction, sentiment was mostly bearish among traders, producers and buyers.
I cannot foresee the trend as its very unclear, [and] I am simply following the prices nowadays, said the Japanese trader.
On Friday, toluene prices in Asia were assessed at $1,020-1,030/tonne FOB Korea, according to global chemical market intelligence service ICIS pricing.
Prices have declined by a sharp $245-250/tonne from the $1,270/tonne FOB (free on board) Korea level seen on 1 July due to poor market fundamentals in Asia and the heavy fall in crude values from above $140/bbl.
Poor demand from China partly due to Olympics-related logistics and production restrictions had also brought imports to almost a standstill in the past two months.
The start-up of at least three new plants from June this year took a sizeable slice from the net demand for imports, said local traders. Most of them believed that a limited recovery of toluene import demand from China could be expected in the coming days.
Monthly imports for 2008 were estimated at about 20,000 tonnes, about 15,000-20,000 tonnes lower than the average monthly imports seen in 2007.
It s very difficult to find an outlet, said a Korean trader, echoing the sentiment of most traders and buyers in South Korea, Japan, southeast Asia and India who were heard holding high inventories which had been purchased above $1,200/tonne FOB or CFR (cost and freight) basis.
Stocks are high as nobody is willing to take spot or keep inventory, a Japanese trader said.
The steep price fall in toluene along with a slowdown in regional economies like China was drawing downstream demand in the region almost a standstill since August, said traders and distributors.
Buyers have lost money after having bought toluene at above $1,200/tonne CFR or $1,300/tonne CFR, and now the price is almost $200-300/tonne lower, said a southeast Asia-based buyer.
We are expecting an incoming toluene shipment of 3,000 tonnes which had been purchased at $1,300-1,310/tonne CFR towards end-July, added a Philippines-based buyer.
Hence, most buyers were heard waiting on the sidelines after having been caught with higher-priced cargoes.
On future market direction, sentiment was mostly bearish among traders, producers and buyers.
I cannot foresee the trend as its very unclear, [and] I am simply following the prices nowadays, said the Japanese trader.
On Friday, toluene prices in Asia were assessed at $1,020-1,030/tonne FOB Korea, according to global chemical market intelligence service ICIS pricing.
