China's domestic toluene price has fallen 4.8% in seven trading days since hitting a peak of Yuan 10,375/mt on January 7, Platts data showed Wednesday.
The price was heard at Yuan 9,900/mt, or $1,309.81/mt on an import parity basis Wednesday, down Yuan 45/mt from the day before.
Prices have been on the downtrend since January 7, but the fall accelerated Tuesday, when prices sank Yuan 180/mt from Monday.
However, the East China inventory level was seen at 28,000 mt last Friday, down 20% week on week.
While the slide in domestic prices was in tandem with a 5.2% fall in FOB Korea prices over the same period, some traders in China felt there were other factors that also contributed to the drop in the domestic price, which happened despite relatively low inventory levels in China.
The FOB Korea toluene marker was assessed at $1,365/mt January 7, and was pegged at $1,294.50/mt Wednesday.
South Korea is Asia's largest producer of toluene, and China its largest buyer.
Traders in China felt that incoming volumes had lowered price expectations for sellers.
"From the inventory perspective, it's not too bad, but everyone is expecting more incoming volumes, so the expectation is that prices will drop," a trader said.
Two traders estimated that 10,000-30,000 mt of toluene headed to China might have traded last week, with one adding that the cargoes would likely arrive in February or March, after the Lunar New Year holiday.
"Maybe people feel lower-price cargoes will emerge," said a trader, adding that "if they don't sell now, future prices may be too low".
"There's no such thing as un-sellable product, only un-sellable price," another trader said.
Domestic buying has slowed as the Lunar New Year approaches, in line with previous years. However, traders this year felt the domestic price could remain at current levels in the near term, or had limited space to fall further. "I hope it won't drop too much," a trader said.
China's domestic price averaged Yuan 9,061.06/mt over 2012.
