High run rates at toluene disproportionation units in Asia to meet strong demand for benzene has boosted demand and prices for toluene, but also led to a glut of isomer-grade mixed xylene, market sources said, in line with S&P Global Platts data.
The isomer-MX versus toluene spread was mostly in positive terrain in 2016, and hit a high of $134/mt on August 5, but narrowed towards the end of the year and flipped to negative on January 5 at minus $3/mt.
On Monday it hit minus $29/mt, with isomer-MX FOB Korea at $737/mt and toluene FOB Korea at $766/mt.
Toluene is the feedstock to make benzene and mixed xylenes in TDP units.
Market sources said demand for toluene into TDP units was boosted by on-purpose benzene production, as benzene prices have hovered around more than two-year high levels recently, last assessed at $1,054/mt FOB Korea, the highest since November 3, 2014, then at $1,067/mt FOB Korea.
“It means toluene is on an uptrend, MX is on a downtrend,” a South Korean producer source said, adding that MX supply was set to increase as TDP units would be running as high as possible at the moment.
A TDP unit will typically produce around half-half of benzene and isomer-MX if it runs on toluene only, thereby maximizing its benzene output, the producer said. Other potential feeds could be mixed aromatics.
“We are trying to run it as much as possible,” another South Korean producer source said about its TDP unit’s run rate.
