The spread between Asian toluene and feedstock naphtha was assessed at a more than four-month low of $263.125/mt Wednesday, down $23.275/mt from Tuesday, as the toluene market came under pressure from weak demand and falling domestic China prices, Platts data showed.
The last time the spread had slumped to this level was on October 19, 2012, at $252/mt. The spread then reached an all-time high of $463.25/mt on December 13, 2012 -- the highest it has been since Platts first started collecting toluene data on May 5, 1995.
But toluene prices have trended lower since then, amid lower downstream FOB Korea benzene prices. The benzene price has dropped 5.8% since the start of the year to $1,396/mt FOB Korea Wednesday.
On Wednesday, FOB Korea toluene was assessed at $1,255/mt, down $21/mt from Tuesday amid a lack of support from the region's largest buyer, China.
Meanwhile, CFR Japan naphtha rose Wednesday, being assessed at $991.88/mt, up $2.38/mt day on day.
Domestic toluene prices in China sank Yuan 250/mt day on day Wednesday to Yuan 9,300/mt, or $1,226.74/mt on an import parity basis, amid inventory in the country. A slow draw down of stocks, and expected incoming cargoes also contributed to the weakness.
Toluene producers require prices to be $70-75/mt above the price of naphtha to break even.
