US toluene prices face pressure amid weak chemical demand.
US toluene prices remained under pressure this week as demand from the chemical segment was largely absent.
Petrotahlil:Spot toluene prices were last assessed at 266 cents/gal and sources said that buy interest was limited with a single trade heard done over the past week.
Buy interest has been notably absent, with multiple sources pointing to limited demand from the chemicals segment because of poor conversion margins. Selective toluene disproportionation units have seen margins depressed on the back of lofty toluene prices and continued softness in paraxylene, and margins have remained in negative territory.
STDP margins were last estimated near minus $112/mt, according to S&P Global Platts data. With spot paraxylene last assessed at $895 and prompt benzene values last assessed at 231 cents/gal, break-even toluene levels would be near 236.50 cents/gal.
STDP margins were not expected to improve in the near term as the US benzene market remained backwardated into July and spot paraxylene prices were not expected to post significant gains in the near term. Producer sources noted that demand from the solvents segment remained strong but constituted a small portion of the overall market.
This left toluene demand strictly in the hands of the blending segment, which put commercial-grade toluene near blend values. May CGT was last heard traded earlier in the week at 255 cents/gal, although this was not immediately confirmed. Meanwhile, toluene's blend value was last estimated near 257.25 cents/gal while reformate's blend value was at 254.23 cents/gal as of close of business Wednesday.
Toluene's premium to RBOB was last seen at 64.73 cents/gal, down near 5.75 cents week on week. Sources anticipated little near-term change, with toluene conversion margins expected to remain negative and demand from the blending segment was expected to remain firm as gasoline demand was expected to improve headed into the summer driving season.
Toluene's premium to reformate, last seen at 14.36 cents, continued to narrow as reformate rose.
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