Toluene imports from the US will help relieve tightness in the Northwest European market and force spot prices lower, market sources said Wednesday.
Spot values are at the highest levels since September 2008 due to reduced supply into the FOB Rotterdam market.
Sources reported 1,000 metric tonne November barges being offered at $960/mt Tuesday. According to one source, a lack of available product would mean buyers having to pay close to the offer level.
"If you have material and there is someone who needs it, then I still think a higher number will be paid. There isn't that much spot available," the source said.
NWE prices have risen steadily since early September as a number of production issues in the European market -- including a turnaround at the former Shell unit at Heide, Germany and a force majeure at Petrogal's Oporto aromatics unit -- have tightened supply.
Although there have been no price indications shown for December the market appeared to be backwardated, with sources saying that imports would ease the current supply problems.
"I think the market is turning. We've seen the peak and with imports coming from the US, we could see it come off," one toluene distributor said.
How much product could arrive into Europe was a matter of debate, however. A major consumer confirmed buying US product for December arrival and there were unconfirmed reports of up to 17,000 mt of toluene being shipped.
One consumer felt this would solve any supply issues in NWE: "I've heard that there could be up to 17,000 mt coming into the market and that could cover two big consumers for their December volume. There is plenty coming in and that will relieve the shortages. I think we could see prices dropping towards US price levels."
Platts data showed the FOB US Gulf Coast market at 288 cents/gallon ($876/mt) November 16 and one source said Wednesday: "US product could arrive in tank in NWE at $910/mt."
The same source added however that 17,000 mt of toluene would cause a "massive glut" in the European market and said that to date he had only heard of a 5,000 mt shipment coming in, all of which had been pre-allocated.
Other sources also said that imports would be much less than the consumers indication.
One trader said: "I can't believe anyone would even bring in 10,000 mt, unless it was a producer who could also use it internally. To use it for spot selling would be suicide. I don't see offers for CIF or CFR for December yet."
An producer added: "If someone is bringing in 17,000 mt, I would think it must be all placed. It would seem too big [a volume] to arrive unsold."
Spot values are at the highest levels since September 2008 due to reduced supply into the FOB Rotterdam market.
Sources reported 1,000 metric tonne November barges being offered at $960/mt Tuesday. According to one source, a lack of available product would mean buyers having to pay close to the offer level.
"If you have material and there is someone who needs it, then I still think a higher number will be paid. There isn't that much spot available," the source said.
NWE prices have risen steadily since early September as a number of production issues in the European market -- including a turnaround at the former Shell unit at Heide, Germany and a force majeure at Petrogal's Oporto aromatics unit -- have tightened supply.
Although there have been no price indications shown for December the market appeared to be backwardated, with sources saying that imports would ease the current supply problems.
"I think the market is turning. We've seen the peak and with imports coming from the US, we could see it come off," one toluene distributor said.
How much product could arrive into Europe was a matter of debate, however. A major consumer confirmed buying US product for December arrival and there were unconfirmed reports of up to 17,000 mt of toluene being shipped.
One consumer felt this would solve any supply issues in NWE: "I've heard that there could be up to 17,000 mt coming into the market and that could cover two big consumers for their December volume. There is plenty coming in and that will relieve the shortages. I think we could see prices dropping towards US price levels."
Platts data showed the FOB US Gulf Coast market at 288 cents/gallon ($876/mt) November 16 and one source said Wednesday: "US product could arrive in tank in NWE at $910/mt."
The same source added however that 17,000 mt of toluene would cause a "massive glut" in the European market and said that to date he had only heard of a 5,000 mt shipment coming in, all of which had been pre-allocated.
Other sources also said that imports would be much less than the consumers indication.
One trader said: "I can't believe anyone would even bring in 10,000 mt, unless it was a producer who could also use it internally. To use it for spot selling would be suicide. I don't see offers for CIF or CFR for December yet."
An producer added: "If someone is bringing in 17,000 mt, I would think it must be all placed. It would seem too big [a volume] to arrive unsold."
