US spot STDP margins dented by stronger toluene

Houston — US toluene conversion margins were seen lower this week as toluene prices remained strong amid softer benzene pricing.

Selective toluene disproportionation (STDP) margins on a spot basis posted sharp declines on the week, falling roughly 41% to close Jan. 14 at just over $36/mt, according to S&P Global Platts data.

The lower margins were attributed primarily to stronger toluene prices as prompt spot values saw continued support from stronger reformate and RBOB futures. Spot reformate prices touched as high as 186.71 cents/gal midweek before closing Thursday at 181.52 cents/gal DAP USGC. The result is a cost push for toluene as producers generally tend to seek a premium over reformate of 15-20 cents when selling toluene. Additionally, RBOB futures reached as high as 155.39 cents/gal Jan. 13 before dropping to 152.50 cents/gal the following day. This lent further support to toluene as bids and offers are frequently seen on an RBOB plus basis.

As of the close of business Jan. 14, prompt spot toluene prices were at their highest level since March 6, 2020, assessed at 209 cents/gal.

The declines in conversion margins were also driven by some slight declines in benzene. Prompt spot benzene prices on a DDP USG basis were down roughly 7 cents/gal ($21/mt) as of the close of business Jan. 14 as the market structure flattened out over the week, with the market seen bid and offered virtually flat through to April.

Prompt spot paraxylene prices were rangebound week on week, last assessed at $680/mt FOB USG.