According to the Commodity Market Analysis System of Shengyi Society, the toluene market experienced a volatile downward trend in August 2024. From August 1st to 30th, the domestic toluene market price fell from 7390 yuan/ton to 6840 yuan/ton, with a price drop of 7.44% during the period.
Mid to early month: The toluene market continued to operate weakly in this cycle, with market prices fluctuating downward. During this period, the decline in crude oil prices dragged down market sentiment, and the overall market atmosphere was bearish. The overall demand is weak, the purchasing enthusiasm of the gasoline blending industry is low, and the downstream market entry enthusiasm is low. Coupled with the weakening of the macro level, the market has a strong atmosphere, and the toluene market has continued to decline.
Late month: The toluene market continued to operate weakly, with Sinopec’s ex factory prices continuously decreasing, dragging down market sentiment and causing a wide decline in spot market prices. In terms of supply, toluene has arrived at ports in East and South China, causing a slight accumulation of inventory and dragging down market sentiment. 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: In August 2024, the crude oil market maintained a range oscillation trend. In the first half of the month, the crude oil market first fell and then rose. In early August, due to OPEC+’s 2.2 million barrels per day production reduction, it will be implemented until the end of September. However, from October onwards, depending on market conditions, production may gradually increase, which is bearish for the crude oil market. In addition, the poor non farm payroll data and rising unemployment rate released by the United States in July, coupled with poor global economic data, have intensified market concerns about the demand outlook and increased negative pressure on the psychological level, leading to a decline in the crude oil market trend. Starting from mid August, the crude oil market began to rise significantly due to the significant decrease in US crude oil inventories and the easing of geopolitical conflicts. Overall, the crude oil market fluctuated within a range. Looking ahead, crude oil analysts from Shengyi Society believe that the current geopolitical instability continues to affect the market. The traditional peak season in the United States is coming to an end, and coupled with poor economic data performance, the crude oil market is mainly volatile. As of August 28th, the settlement price of the main contract for WTI crude oil futures in the United States was $74.52 per barrel; The settlement price of the main Brent crude oil futures contract is $77.58 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 August 30th, East China Company quoted 6800 yuan/ton, North China Company quoted 6800 yuan/ton, South China Company quoted 6800-6850 yuan/ton, and Central China Company quoted 6950 yuan/ton.
Demand side: The external market for xylene continues to decline, and the demand support for toluene is relatively weak
On August 30th, Sinopec executed a price of 8050 yuan/ton for xylene, a decrease of 500 yuan/ton compared to July 2024. The PX price continued to decline both inside and outside the cycle, with CFR China closing at $927-929/ton as of August 29th, a cumulative decrease of $65/ton from $993/ton at the end of July.
During this period, the overseas market for toluene in Asia has significantly decreased. As of August 29th, the closing price of FOB Korea in September was 814-816 US dollars per ton, a decrease of 37 US dollars per ton; The closing price of CFR China in September is $823-825 per ton, a decrease of $61 per ton.
Market forecast: The toluene market will continue to decline in August, and the current price has fallen to a new low for the year. Although the crude oil market will strengthen to some extent at the end of the month, the boost to the market will be limited. In terms of supply, with the recent commissioning of some early maintenance facilities in the northern region, the overall supply of toluene in the northern region is relatively loose, while in the southern region, there are more incoming goods at the end of the month, and the overall supply in the region is relatively loose. Under the influence of loose supply, the current toluene market atmosphere is weak. There has been no significant improvement in demand recently, and downstream companies will continue to replenish inventory as needed. Overall, negative factors in the toluene market still dominate, and it is expected that the toluene market will continue to operate weakly in the short term. In the future, the focus will be on downstream demand.
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