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Asia benzene/toluene spread plunges to more than two-year low of $1.50/mt

http://www.chemnet.com   Mar 04,2015 Platts Platts Platts
Asia benzene/toluene spread plunges to more than two-year low of $1.50/mt
The Asian benzene-toluene spread slid to a more than two-year low of $1.50/mt Monday, March 2, making it even more uneconomical for benzene producers to use toluene as feedstock.

Other feedstocks for benzene production include naphtha.

The last time the spread was lower than this level was on May 22, 2012, when it was assessed at minus $4.50/mt.

Since then, the spread has ranged between $5.50/mt and $247.50/mt.

It is not unusual for the benzene-toluene spread to fluctuate widely.

Benzene has to be at a premium of $100-$120/mt to toluene for operators of toluene disproportionation and hydrodealkylation units to breakeven.

The benzene-toluene spread shrunk more than $32/mt Monday compared to last Friday, as the FOB Korea toluene price gain outpaced that of benzene.

FOB Korea toluene rose 9%, or $59/mt, to $716.50/mt Monday on firm buying interest for FOB Korea-loading cargoes.

Domestic China toluene prices also surged with prices rising Yuan 300/mt to Yuan 5,190/mt Monday as compared to Friday.

This equates to $695/mt on an import parity basis for prompt loading cargoes.

A Chinese trader said that players thought that the market may have reached the bottom and is now heading for a rebound.

"Sentiment is also getting better," she added.

Meanwhile, FOB Korea benzene prices gained just 3.9%, or $27/mt, to $718/mt on Monday, with a closed arbitrage from Asia to the US, and soft China demand capping gains.
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