The premium of mixed xylenes over toluene hit an 18-month high Thursday as supplies of MX in Europe remained tight.
Spot MX prices were assessed at $560.50/mt FOB ARA Thursday, while spot toluene loading 5-30 days forward was assessed at $527.50/mt.
This placed MX at a $33/mt premium over toluene, the highest level since hitting $100/mt on January 8, 2015.
MX strengthened as producers held back from extracting extra volumes for spot sales, while there were also reports that some extracted MX volume did not meet required specifications.
"MX is on the tight side, we are getting enquires from customers we normally don't hear from," a Germany-based distributor said.
Meanwhile, the arbitrage to the US and Asia remained open on paper for MX. With Isomer MX CFR Taiwan assessed at $681/mt Friday and MX FOB USG August values at $636.30/mt Thursday, this made them $120.50/mt and $75.80/mt more expensive than European prices.
Throughout 2015 and H1 2016, gasoline blending interest had mostly dominated the MX and toluene markets, while blend economics remained favorable. With toluene having slightly better octane boosting values, toluene had mostly traded at a premium to MX in that period. But as blend economics started weakening, toluene and MX prices mostly remained at parity in June.
Whereas buying interest from gasoline blenders hovered below $70/mt, sellers were largely uninterested in values below $110/mt. MX premiums had remained weak in June as the mogas-naphtha spread narrowed, with gasoline blenders reacting with caution.
This pushed chemical buyers to the aggressive end of the bid spectrum, although with hardly any trades taking place as sellers stuck to their guns.
The MX premium over July EBOB gasoline swap was assessed at $107/mt Thursday, whereas the toluene premium over the same swap stood at $74/mt.
