he European spot price of toluene for 5-30 days forward loading rose $13.50 on Tuesday to be assessed at $650.50/mt FOB ARA, putting the toluene spot price $8.50 above European benzene after gasoline prices were boosted by the strikes by refinery workers in France.
Toluene has not traded at a premium to benzene since October last year.
The European spot price of benzene was assessed at $642/mt CIF ARA on Tuesday, shedding $0.50 on the day, due to global length in the benzene market and an overall bearish sentiment.
The toluene spot price was however buoyed by a sharp rise in gasoline swaps on the French strike by $1.80 to $14.85/b at the beginning of last week. Toluene’s premium to the June Eurobob gasoline swap was assessed unchanged at $115/mt on Tuesday. Toluene is used as a gasoline blending component.
This means that on-purpose toluene to benzene conversion units in Europe are running at a considerable loss because a $150-$200/mt benzene premium to toluene is usually needed for the conversion to break even.
“Benzene does not react to gasoline [as toluene does], and pygas seems to be in good supply,” a toluene buyer said on Wednesday, adding that the he expected the relative pricing of toluene and benzene to stay unchanged for a while.
A benzene trader said that in the absence of any cross-regional benzene arbitrages and ample availability of feedstock pygas, the outlook for benzene seemed bearish.
On Wednesday morning, a bid-offer range for CIF benzene barges loading in June was heard at $635-$645/mt.
Meanwhile, notional bid-offer ranges for toluene barges loading in June were heard in a range of a $90-$120/mt premium to the June Eurobob gasoline swap — heard trading at $536.50/mt early Wednesday — indicating a toluene bid-offer range of $626-$656/mt.
