Industry News
After phased digestion and consolidation, the market price of toluene has risen strongly
Specifically, prices have been rising rapidly since early July, reaching a new high within the year. However, the upward trend slowed down in August, and after a period of digestion and consolidation, prices began to rise strongly again in late August.
The main factors driving the strong rise of domestic toluene market are as follows:
1. The strong rise in international crude oil prices, coupled with prolonged production cuts in Saudi Arabia and Russia, has led to a sustained tightening of the crude oil supply side. The driving season in North America has driven gasoline prices, while Asian refineries are operating at high levels, crude oil consumption is high, and many factors such as the impact of the North American hurricane season on the supply side have led to a strong rise in crude oil prices. WTI prices have risen from around $70 per barrel in early July to over $90 per barrel in mid September.
2. The strong demand for gasoline blending in the United States and the rising prices of gasoline and aromatic products have led to the opening of arbitrage windows for aromatic products in Asia and America. A large number of aromatic products in Asia are flowing to the United States, which has driven the US dollar price of toluene in Asia and further boosted the price of toluene in domestic trade.
From the perspective of domestic supply and demand, the domestic supply of toluene commodities significantly increased in the third quarter, mainly due to the separation of mixed aromatic hydrocarbons to produce toluene and xylene in many places, resulting in a rapid increase in the supply of toluene commodities.
Although there is a significant increase in supply, due to the large flow of toluene from Japan, South Korea, and other countries to North America, the supply of toluene in Asia is also tight, and the supply gap of toluene in Southeast Asia needs to be supplemented, promoting an increase in domestic toluene exports. The significant increase in export volume has greatly alleviated the growth of domestic supply pressure. During this period, although port inventory accumulated for a while, the accumulated amount was accompanied by timely release of export loading. The domestic toluene supply remained tight throughout the third quarter.
The strong rise in the domestic toluene market in the third quarter was mainly driven by the strong logic of North American oil transfer. However, with the rise in prices, the comprehensive profitability of downstream chemical industry in China has been affected to some extent. Various downstream products of chemical synthesis have experienced varying degrees of profit decline or losses, and the losses of disproportionation have further worsened in the third quarter. Other downstream comprehensive operating rates of chemical synthesis have experienced periodic declines, However, the overall decrease in consumption of toluene is not significant, and the long-term loss of disproportionation has led to a further decrease in operating rates in the third quarter. Some of the self consumption of disproportionation has been converted into commodity volume and flowed into the market.
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