Weak demand saw China's imports of toluene plunged to a near six-year low in August, with market sources expecting the bearish sentiment to prolong for the foreseeable future.
China's toluene imports in August fell 73% from the previous month to 18,273 mt, and were down 78% from 84,868 mt a year ago, data released Tuesday, September 23, by the General Administration of Customs showed.
The last time it was lower was in October 2008, when China imported just 4,644 mt of toluene amid the then global credit and financial crisis, according to historical customs data.
China's demand for toluene has been waning since the end of the first quarter of 2014, amid an array of challenging market conditions including cheaper alternatives such as mixed aromatics, limited availability of credit in a tough economic environment and slowing GDP growth in the country.
This has put regional toluene prices on a downward trajectory, despite South Korea's toluene exports tightening structurally following the start-up of a new 1 million mt/year paraxylene plant at Ulsan in early June.
The FOB Korea marker for toluene has tumbled to be assessed $1,061/mt Tuesday, its lowest in four months.
Its last low was on May 20, when it was also assessed at $1,061/mt.
The new Ulsan PX plant owned by SK Energy and JX Nippon Oil and Energy utilizes toluene disproportionation technology which uses toluene as a feedstock to produce paraxylene.
Runs at the plant reached full capacity by the end of June, resulting in a corresponding fall in South Korea's toluene exports.
South Korean toluene exports in July slid to the lowest level in more than 6.5 years to a mere 30,341 mt, as more toluene was being diverted for local PX production.
Exports were last lower in January 2008, when they slipped to 29,563/mt, according to historical customs data.
Meanwhile, weak performance of downstream products such as benzene, have added to the bearish sentiment.
The FOB Korea benzene marker Tuesday was assessed at $1,178.50/mt, plummeting to its lowest in more than two years.
It was last lower on September 5, 2012, at $1,176.50/mt, Platts data showed.
