The curious case of Toluene; a comprehensive price study – 11 Dec 2014

Toluene has shown immense downward trend in domestic as well as International markets over the previous two months. To begin with, let’s analyze the pricesfor the month of October during which the sharp slump for Toluene began.

During the second week of October, (i.e from 10th October to 17th October, 2014)the pricesdeclinedby 5.7% tosettle at$ 954 per MT FOB Korea. The week turned out to be quite rough for both the traders and importers. The reason behind this decline was the sudden collapse of demand that slid by about 27%during the same period. Indianpetrochem.com assimilated that it was theinfluence of sliding crude oil prices.

Before the market could have stabilized, toluene prices again start moving in the southward direction and the next week (24th October 2014-31st October 2014) went bland for the toluene traders because the prices dipped again by more than 5% to $ 922.5 per MT FOB Korea. As far as the domestic prices for Toluene are concerned, they did not show much movement during the month of October, 2014. In fact domestic manufacturers did not bother to change the pricing even once during October. The listed price of Toluene for RIL and BPCL was Rs.76 per kg and Rs.74.5 per kg respectively.

With the ensuing winter season, market recovery was almost impossible. International prices delated for the fourth consecutive week to $ 869.5 per MT on November 7th 2014 and if this wasn’t an enough tail off price fell further by 8.3% $ 796.5 per MT on 14th November 2014. Consumption dropped by 38% during the same. Though, the prices did improve marginally by the third week of November, only to settle at $ 805 per MT.

RIL revised their prices of Toluene twice in the month of November. On 1st November 2014, RIL declined their price by 11% to Rs 67.50 per kg. To a surprise, BPCL kept their prices in the same range of Rs 74.50 per kg. On 15th Novemebr 2014, RIL again plunged down its price by Rs 7.5 per kg to Rs 60 per kg while BPCL decreased their prices by 7.3% to Rs 69per kg.

An official from RIL share their experience with indianpetrochem.com, “ Market of the toluene is getting worse from last few weeks and there is no hope of recovery in the market any time soon. It could only stablise if there is any positive movement in crude oil prices and we are expecting that market may stablize by the end of January 2015.

Importers as well as big buyers reduced their stocks by more than 55% during November. While December month has not shown any signs of upward moment as yet and prices continue with the downward movement.

On 10th Dec 2014 the prevailing toluene price was $ 673.5 per MT.