The FOB Korea toluene 2013 term contracts were mostly concluded at a premium of $7-8/mt to the Platts FOB Korea toluene marker, traders and producers said Wednesday.
This is an increase of around $2-3/mt from premiums for 2012 contracts.
South Korea's Honam, which can produce 200,000 mt of toluene a year, has concluded four term contracts for 2013 at a premium of $8/mt to the Platts FOB Korea assessment, up $3/mt from 2012, a company source said Wednesday. The number of term contracts is four, unchanged from 2012.
A source from LG Chem refused to reveal the premiums for 2013, but he did say that the level was in keeping with what the market has been saying, which is about $7/mt. LG Chem has toluene plants at Daesan and Yeosu, with a capacity of 60,000 mt/year and 100,000 mt/year, respectively.
The source saw premiums as "definitely higher than last year," adding that China's toluene demand was expected to be firmer in 2013.
Yeochun NCC has concluded a 2013 term contract at a premium of $8/mt to the Platts FOB Korea assessment, a company source said. The company has a total toluene production capacity of 235,000 mt/year.
South Korea's OCI, which has a production capacity of 30,000 mt/year of toluene, is continuing to focus on the domestic market where it is negotiating term contracts with end-users, a company source said. It has no term contracts with overseas buyers in 2013. It is currently only offering a spot cargo for February.
A producer in South Korea said that high benzene and paraxylene prices are supporting toluene demand this year. Premium could go up further in 2014 with new paraxylene production capacity expected to come online, he added.
JX and South Korea's SK Innovation are planning to build a 1 million mt/year PX plant at Ulsan. The plant is due to start commercial operations in August 2014.
Meanwhile, LG Chem has been using all its toluene capacity to produce benzene in its hydrodealkylation unit at Daesan since early December due to higher benzene prices.
