Prices are bottoming out

By Staff -- Purchasing, 5/7/1998

Buyers can expect toluene prices to bottom out in the second quarter, because the summer driving season will increase octane demand, putting upward pressure on toluene tags as demand for this aromatic chemical rises. There is, however, good news for buyers. Prices will remain low, staying under $1.00/gal through the rest of 1998.

Buyers, responding to Purchasing's monthly chemical transaction price survey, forecast prices will average 88(cent)/gal in the third quarter. That's up from an estimated 85(cent)/gal in the second quarter. Prices will bottom out in the mid-80(cent)/gal range.

Domestic toluene prices zigzagged through 1997. In the first quarter, contracts averaged $1.06/gal. These prices fell to 98(cent)/gal in the second quarter, then jumped to $1.02 in the third quarter. Contracts continued to rise in the fourth quarter, climbing to an average of $1.08/gal. Tags weakened in the first quarter of this year, falling to $1.03/gal.

Spot toluene prices also jumped around in 1997 but did not follow the contract pricing pattern. Spot tags averaged $1.07/gal in the first quarter, then moved up a penny in the second quarter. These prices continued to increase in the third quarter, jumping to an average of $1.20/gal. After that, prices began to fall, sliding to $1.11/gal in the fourth quarter before slipping to 96(cent)/gal in the first quarter.

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