Asia toluene premium to US rises to $81.50/mt, arbitrage window opens on paper

The arbitrage window for toluene from Asia to the US was open on paper Tuesday, the FOB US Gulf price assessed at 375 cents/gallon or $1,140/mt overnight, up 12 cents/gallon from Monday amid stronger demand.

Meanwhile, FOB Korea toluene was assessed at $1,058.50/mt Tuesday, stable from Monday amid ample supply.

Based on latest prices, the premium for FOB US Gulf premium compared with FOB Korea is $81.50/mt, up 81% from Monday.

Freight for 10,000 mt of toluene from South Korea to the US Gulf Coast was assessed at $66-70/mt Tuesday, stable from Monday.

Deducting a $70/mt freight from the spread leaves a margin of $11.50/mt.

Early Tuesday, however, the FOB Korea toluene marker rose $10.50/mt to be pegged at $1,069/mt.

A trader said that the likelihood of arbitrage could have resulted in fewer sellers in the market, tightening supply and supporting prices.