According to the Commodity Market Analysis System of Shengyi Society, the toluene market continued to decline in September 2024. From September 1st to 30th, the domestic toluene market price fell from 6840 yuan/ton to 5890 yuan/ton, with a price drop of 13.89% during the period.

Early this month: The toluene market continued to operate weakly, with market prices fluctuating downward. The decline in the crude oil market has dragged down the weak mentality of the toluene market. In terms of supply, the overall inventory of toluene in East and South China was low this week. However, due to the downstream wait-and-see mentality, market trading is clearly sluggish. The main refineries have repeatedly lowered their ex factory prices, and local refining enterprises have continuously lowered their quotations. Downstream companies are observing and the purchasing enthusiasm is generally weak.

Late January: The toluene market continued to operate in a weak position. The market was boosted by the rise of crude oil around the Mid-Autumn Festival. The toluene market recovered slightly for a short time. Affected by the weak actual downstream demand, the increase in the callback range was limited. After the holiday, Sinopec’s ex factory prices continued to decline, dragging down market sentiment and causing a wide decline in spot market prices. The overall demand is weak, and the purchasing enthusiasm of the gasoline blending industry is low. Downstream demand is biased towards rigid demand, and under the influence of negative factors on the supply side, market prices continue to operate at a low level.

Cost wise: The crude oil market is declining, and this news is negative for international oil prices due to the easing of tensions in the Middle East. Global crude oil demand fell short of expectations, coupled with the end of the peak oil season in the United States, dragging down the crude oil market and causing a decline in crude oil market prices. The rise in crude oil market prices in the later stage of this cycle, coupled with the tense geopolitical situation in the Middle East and the Federal Reserve’s interest rate cuts, has boosted the crude oil market. Overall, the crude oil market has declined during the cycle. As of September 26th, international crude oil futures have fallen. The settlement price of the main contract for WTI crude oil futures in the United States is $67.67 per barrel. The settlement price of the main Brent crude oil futures contract is $71.09 per barrel.

Supply side: Sinopec’s toluene quotation has been lowered multiple times during the cycle, but there are slight differences in the amplitude of each underground adjustment. At present, the enterprise is operating normally, the production of equipment is stable, the products are mostly for personal use, and the production and sales are stable. As of September 27th, East China Company quoted 6000 yuan/ton, North China Company quoted 5800 yuan/ton, South China Company quoted 5850-5950 yuan/ton, and Central China Company quoted 5900 yuan/ton.

Demand side: The external market for xylene continues to decline, and the demand support for toluene is relatively weak

On September 30th, Sinopec Sales Company implemented a price of 7350 yuan/ton for xylene, a decrease of 700 yuan/ton from the price on August 30th, 2024. During this price cycle, PX prices in East China, North China, Central China, and South China continued to decline both domestically and internationally. As of September 27th, CFR China’s closing price was 842-844 US dollars/ton, a cumulative decrease of 85 US dollars/ton from 927-929 US dollars/ton at the end of August.

During this period, there was a significant decline in the Asian toluene market. As of September 27th, the Asian toluene market had a closing price of $751-753 per ton FOB Korea in October, a decrease of $63 per ton; The closing price of CFR China in October was 743-745 US dollars per ton, a decrease of 80 US dollars per ton.

Future forecast: From a cost perspective, the expected improvement in the crude oil market will boost market sentiment. At present, the overall inventory of toluene in the supply side is at a stable, medium, and low level, which is a certain positive boost to the market. The downstream market has performed poorly in terms of demand, maintaining the intention to purchase for essential needs, and the demand side remains weak. At the end of the month, Asian external prices rose, boosting market sentiment, and the toluene market slightly rebounded. However, overall, weak demand has constrained the upward potential of the toluene market. It is expected that the toluene market will continue to maintain a weak and volatile trend in the short term. Focus on downstream stocking situation in the future.