The benchmark FOB Korea toluene marker slumped to a four-year low Friday, November 7, on persistent weak demand and sagging downstream markets, said trade sources Monday.
The FOB Korea toluene marker was assessed at $870/mt Friday, up $5/mt day on day. It was last assessed any lower at $867.50/mt on October 13, 2010, data showed.
The marker reached a high of $1,222/mt on June 26, but has lost close to 30% of its value since then, according to Platts data.
Demand for toluene, particularly in China, has been waning amid an array of challenging market conditions including availability of cheaper alternatives like mixed aromatics; limited availability of credit in a tough economic environment; and slower GDP growth, trade sources said Monday.
The Asian toluene market saw a significant shift in dynamics this year with South Korea turning from a net exporter to a net importer of toluene on the back of a new 1 million mt/year paraxylene plant coming online in June, Platts has reported.
The plant is operated by SK Energy and JX Nippon and runs on the toluene disproportionation technology, using toluene as a feedstock to produce PX.
Despite a structurally tighter market with higher domestic consumption and lower exports from South Korea, Asian toluene prices have failed to sustain strength since the highs seen in June this year.
Downstream markets such as benzene and PX have also lost steam on the back of lagging demand and ample supplies, said trade sources.
– Platts.com
