Toluene prices in India now offer attractive netbacks for traders sitting on inventory in Northwest Europe, sources said this week.
Exports from Northwest Europe to India were prominent in the first half of the year until export demand collapsed in July.
The European spot price of toluene was assessed by S&P Global Platts at $572.50/mt FOB ARA on Wednesday, down $9/mt on the day and down $24.50/mt since October 6, when the European toluene spot price hit its highest since June 6 this year.
Earlier this week, the toluene spot price in India was heard pegged at $670/mt CFR. A Europe-based trader said that freight costs for a 2,000 mt toluene parcel from the Antwerp-Rotterdam-Amsterdam region was currently quoted at $90/mt, leaving traders with a potential profit of $7.50/mt.
The October contract price of toluene settled at $556/mt FOB ARA. For those with unwanted contractual volumes, the netback from India would provide a profit of $24/mt.
Meanwhile, Asian toluene prices were assessed at $637/mt FOB Korea, making the arbitrage from Korea to India more challenging to work.
Toluene's premium to Eurobob gasoline swaps was assessed at $73/mt on Wednesday, down $2/mt on the day and down $16/mt since last week.
The European toluene market is seen bearish for the time being, as a large downstream force majeure has increased length in the market and gasoline blending demand has gone softer this week.
