The bulk price for Toluene declined by Re. 1 a kg today amid sluggish demand within the country. Indianpetrochem surveyed this market sentiment by talking to some market participants and gained some insights on the current and future demand trend.
According to data gathered by the Ministry of Chemical and Fertilizers, in 2012-2013 the installed capacity for Toluene in India was 258, 000 metric tonne while total production stood at 108, 000 metric tonne, thereby the approximate capacity utilization factor was at 42 %. At the other end of the spectrum, the total consumption for the aromatic was around 410, 000 metric tonne in the same year.
This data indicates the market share for imports against domestically manufactured Toluene.
"Kochi and BPCL haven't been producing the aromatic since a long time and IOCL products aren't available in the market. Meanwhile, Reliance directly sells the aromatic to end-customers, as such traders in the market are reliant on imports to fulfill the demand", an authorized dealer told Indianpetrochem.
Various market participants had different reasons for the sluggish demand of Toluene. Some traders felt that Holi festivities curtailed current demand from end- users while other set of traders logically related the low industrial output in India to the declining demand for the solvent.
A set of traders even speculated that low industrial output from China have pulled down prices for most petrochemicals in Asia, due to which the booking price for imports to India have declined.
A Mumbai based trader cited, "Main reason for the decline in price for Toluene is due to a fall in demand, rather than a surge in imports".
Currently, the total quantity of Toluene at Mumbai port is approximately 8,664 metric tonne while the current bulk price ex-Kandla is Rs. 73 per kg (exclusive of all taxes), based on Indianpetrochem market sources.
Going forward, some trader speculate that the demand for the solvent is going to remain poor in the coming three to four months, until the elections whereafter there is an expectation that the manufacturing sector will gain momentum.
In Mumbai market imported and domestic repacked Toluene sells at Rs. 77 per liter (exclusive of VAT).
There is uncertainty around the time-frame of this lull in demand; hence, the future price outlook for the solvent is unpredictable.
By Ntasha Berry (ntasha.berry@indianpetro.com)
According to data gathered by the Ministry of Chemical and Fertilizers, in 2012-2013 the installed capacity for Toluene in India was 258, 000 metric tonne while total production stood at 108, 000 metric tonne, thereby the approximate capacity utilization factor was at 42 %. At the other end of the spectrum, the total consumption for the aromatic was around 410, 000 metric tonne in the same year.
This data indicates the market share for imports against domestically manufactured Toluene.
"Kochi and BPCL haven't been producing the aromatic since a long time and IOCL products aren't available in the market. Meanwhile, Reliance directly sells the aromatic to end-customers, as such traders in the market are reliant on imports to fulfill the demand", an authorized dealer told Indianpetrochem.
Various market participants had different reasons for the sluggish demand of Toluene. Some traders felt that Holi festivities curtailed current demand from end- users while other set of traders logically related the low industrial output in India to the declining demand for the solvent.
A set of traders even speculated that low industrial output from China have pulled down prices for most petrochemicals in Asia, due to which the booking price for imports to India have declined.
A Mumbai based trader cited, "Main reason for the decline in price for Toluene is due to a fall in demand, rather than a surge in imports".
Currently, the total quantity of Toluene at Mumbai port is approximately 8,664 metric tonne while the current bulk price ex-Kandla is Rs. 73 per kg (exclusive of all taxes), based on Indianpetrochem market sources.
Going forward, some trader speculate that the demand for the solvent is going to remain poor in the coming three to four months, until the elections whereafter there is an expectation that the manufacturing sector will gain momentum.
In Mumbai market imported and domestic repacked Toluene sells at Rs. 77 per liter (exclusive of VAT).
There is uncertainty around the time-frame of this lull in demand; hence, the future price outlook for the solvent is unpredictable.
By Ntasha Berry (ntasha.berry@indianpetro.com)
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