The spread between benzene and upstream toluene narrowed to $164/mt on Wednesday, the narrowest since January, due to benzene weakening even as toluene turned firmer.
The last time the spread was narrower was December 17, 2013, when it was $160/mt.
The FOB Korea toluene marker was assessed at $1,171/mt Wednesday, up $7/mt from Tuesday, while FOB Korea benzene was assessed at $1,335/mt, down $29.50/mt from the day before.
Asian toluene has risen on falling exports from South Korea in June. Toluene exports from South Korea fell 49.1% from May to 49,728 mt in June. Stocks in China were also falling with the country importing fewer toluene cargoes in the last couple of months, market sources said. According to the latest customs data, China's imports in May were 25% lower from 130,403 mt in April. Import statistics for June are yet to be released.
Toluene inventories in China stood at 154,000 mt in early April, but had fallen to 117,500 mt by early July, market sources said earlier.
FOB Korea benzene was assessed at $1,335/mt on Wednesday, down $29.50/mt from Tuesday as the laycans rolled forward. Asian benzene has been trending downward, tracking US benzene, and narrowing arbitrage margins.
From a peak of $1,425/mt on June 25, FOB Korea benzene had shed 6.31% by Wednesday. During the same period, FOB US Gulf benzene fell 8.63% to 487 cents/gal.
The fall can also be attributed to rising benzene supply in Asia with the startup of some new benzene/paraxylene plants. South Korea's SK Energy and Japan's JX Nippon Oil and Energy started up their joint venture aromatics plant at Ulsan in June, and have achieved on-spec production of both paraxylene and benzene.
Separately, South Korea's Samsung Total is producing on-spec benzene and paraxylene at its new No. 2 aromatics plant in Daesan, which started up in early July.
