Europe toluene swings into ample supply despite turnarounds

LONDON (ICIS)–European toluene has swung into a balanced or even long position as a cargo is due to land this week in a market suddenly much better supplied than players had thought.

– Spot availability high in September, confounding expectations
– Volumes shipped north from southern Europe
– Turnaround season had been expected to tighten market

Turnarounds are taking place or are due to start at several plants in Europe through September and October, according to market sources.

A sudden rash of offers in the market has caught several traders and consumers by surprise when it had looked “super tight”, said one trading source.

At the end of August tighter supply had been mooted, so much so that a cargo was brought up to northwest Europe by a trader from Portugal/Southern Europe with the intention of selling it into an Amsterdam-Rotterdam-Antwerp (ARA) market believed to be full of buyers.

Producers in that region typically supply the Mediterranean and North Africa, rather than bring material so far north.

Offer of the cargo arriving into northwest Europe is a “big game changer”, said one consumer.

Another trading source said: “Nobody wants anything. Everyone’s tanks [are] full suddenly.”

A second European buyer had expected a shortage in September due to the maintenance period.

“Last month, looking to September I was a bit worried about supply because [of a] lot of turnarounds going on in the European market. But [to] look at current situation, ask for any volumes, for sure [there are] not any issues to get it,” said the buyer.

A more balanced market had been expected with the restart of BASF’s toluene di-isocyanate (TDI) plant. But there is another TDI plant believed to be doing maintenance work.

Despite a number of offers of material, there are those who anticipate the complete opposite and shorter supply in the market.

One producing source said: “I believe that demand will outstrip supply, especially in the TDI grade as a result of the restart of BASF plant.”

It added: “Also around October we will have the change to winter grade in gasoline, and this may also affect the blending demand of aromatics.”

Focus article by Vicky Ellis

Picture source: WestEnd61/REX/Shutterstock