Toluene hydro-dealkylation units in Europe are maximizing their run rates amid continuous strength in the benzene market, leading to a renewed interest in incremental toluene, according to sources.
This has already triggered some spot toluene buying this week, with Dow reportedly purchasing a 3,000 mt parcel of TDI grade toluene from Essar.
Neither company was available to comment on the trade.
HDA units convert heavier aromatics into benzene, however, normally they would use cheaper aromatics cuts, such as a mix of toluene and xylenes, in order to maximize the margin. However, as benzene prices are still strong even higher quality toluene appears to be in demand.
Benzene is currently trading at $1,470/mt CIF ARA for April dates. TDI grade toluene was last assessed at $1,105/mt FOB ARA Wednesday, leaving a spread of $365/mt to cover conversion costs and give a hefty margin.
The European benzene production is likely to remain reduced as feedstock pygas availability will continue to be tight amid light cracking, sources said.