Toluene Prices Changed In India Amidst High Inventories And Lower Domestic Prices

Toluene prices in India have experienced fluctuations in recent weeks due to several factors impacting the market. While improved domestic demand led to an increase in prices earlier this month, the decision by Reliance Industries to reduce its toluene price by 4 Rs/kg has resulted in bearish toluene prices in the country.

Fluctuations In Toluene Prices

On 2 March 2023, toluene prices in the domestic market increased by 1.5 Rs/kg, with BPCL raising its prices by 2 Rs/kg and other manufacturers offering higher prices. This was due to improved demand from the paint and coating industry, pharma industry, ink industry, and packaging industry. The market sentiments were positive, and traders started lifting inventory as port inventory drawdowns occurred. In the international market, toluene prices were assessed at 890 $/Mt FOB Korea.

On 4 March 2023, domestic toluene prices increased by INR 1/kg, reaching Rs 83.50++ ex Mumbai and Rs 83.00++ Kandla. However, Reliance Industries Limited (RIL) reduced its toluene prices to INR 82++ ex Hazira by Rs 4/ kg. This led to concerns among traders and imports with high inventories at ports.

Market Sentiments Impacted By High Inventories At Indian Ports

High inventories at Indian ports and domestic manufacturers’ low prices have impacted current market sentiments, with concerns raised by traders and importers holding thick inventories. In contrast, toluene prices in China have picked up on improved downstream demand, with prices assessed at 936 $/Mt CFR China.

Meanwhile, in the international market, FOB Korea toluene prices remain stable at 895 $/mt, while CIF India toluene offers 1020 $/Mt for March shipments. The spread between toluene to benzene looks weak and narrowed to 35$, which is below the breakeven level of TDP crackers, leading to a revision of 50$ seen in Korean toluene prices.

Insight

Toluene prices are expected to be bullish in the coming week due to increased demand from downstream industries and positive market sentiments. This presents a good opportunity for businesses in the paint and coating industry to stock up on toluene. However, weak demand and low prices from Reliance Industries Limited may keep toluene prices low or stable until the Holi festival. This provides a favourable environment for businesses that use toluene, as they can purchase it at a more affordable price.

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