The Asian toluene market led a price surge in most Asian aromatic products early Wednesday, driven by crude oil futures rising on geopolitical tensions in Syria.
Front-month ICE Brent crude futures hit a six-month high Wednesday, with October ICE Brent crude futures up $1.52/barrel (1.33%) from Tuesday’s settle at $115.88/b at 10:30 am in Singapore (0230 GMT).
The FOB Korea toluene marker was pegged at $1,148/mt Wednesday, up $17/mt from Tuesday’s assessment.
On Wednesday morning, the best bid for October FOB Korea toluene cargo was $1,148/mt, up from Tuesday’s assessment of $1,134/mt.
Some market sources said toluene’s price rise would be capped by high inventory in China.
Since August 16, East China inventory levels have been at their highest in more than two years at 154,000 mt, sources said. They were last higher March 18, 2011, at 155,000 mt.
Asian benzene prices edged up $10/mt from Tuesday’s close to $1,279.50/mt early Wednesday, amid active discussions in the spot market for October and November cargoes.
Industry sources said the surge in spot aromatics prices was restricted by lower Asian equities markets and weak global macroeconomics.
“The reason for the bullish crude is due to the tension in Syria, but the world economy is weak,” said a South Korean trader.
Asian isomer-grade mixed xylenes were pegged at $1,321/mt FOB Korea Wednesday morning, up $8/mt from Tuesday’s assessment, with bid levels heard at $1,316-1,320/mt FOB Korea. The CFR Taiwan marker rose $3/mt over the same period to $1,336/mt.
The Asian isomer-MX market is tight due to upcoming turnarounds in Japan and South Korea that are expected to cause a shortfall of around 120,000 mt/month from September-October, the closure of the US-Asia arbitrage on paper and strong demand from buyers, according to market sources.