Europe TDI/nitration toluene spread widens; demand for blending recedes

The nitration grade toluene's discount to TDI quality material has widened once again in Europe, as interest from gasoline blenders and traders, who could work the arbitrage into the US, is receding, according to industry sources.

The TDI grade toluene was assessed at $1,109/mt FOB ARA at Friday's close, while nitration grade was assessed at $1,095/mt, thus putting the quality spread at $14/mt.

TDI quality material with a purity of 99.9% is used by the chemical sector to produce polyurethanes. Nitration grade toluene (99.7% purity) is widely used as a solvent and for gasoline blending.

The spread narrowed in the second half of July to as little as $3/mt, when toluene spot prices were being set primarily by the gasoline blending value and the open arbitrage window to the US.