Traders are looking to ship toluene from Northwest Europe to the US Gulf Coast because supply constraints in the USGC have triggered strong price gains in the aromatics markets, sources said Tuesday.
The FOB USGC August market was assessed at $4.12 cents per gallon ($1,252/mt) On Monday while the FOB Amsterdam-Rotterdam-Antwerp market was offered at $1,165/mt for July loading in the European morning Tuesday. Freight between the two regions was said to be $40-45/mt for 5,000 mt parcels by multiple sources and $50-55/mt for 3,000 mt and vessels are being fixed for shipment sources said.
According to one source "there is a 6,000 mt toluene parcel sailing to the US" while a trader said that a 3,000 mt parcel bought from the UK last week, "would end up in the US" with the trader adding: "It makes sense with the price levels over there."
A second trader also said that there were "cargoes moving" to the US adding: "I've bought a few thousand tons and others are trying too."
Supply of toluene in the US Gulf has been restricted by low running reformers for some time now, but sources also believe that strong benzene prices in the region caused by a tight prompt market could increase toluene demand to run toluene disproportionation units.
One industry source felt the US strength could continue to increase due to demand for toluene to produce benzene, which was pricing at more than $1,500/mt on a prompt FOB USGC basis.
The source said: "I would not be surprised to see toluene move up further in the US, where there will be demand from TDP units. The increase in the benzene market will reflect on toluene."
Further movements out of Europe may be restricted by a lack of product however, with sources reporting limited offers in the spot market, while domestic contract off-take remains stable.
One trader said there was "not much toluene around now" while another source added: "There is one shipment that I see, but other than that, there doesn't seem to be any product available."
