According to the bulk list data from Business Society, the toluene market rose and fell in April. On April 1st, the benchmark price of toluene was 7410 yuan/ton, and on April 30th, the benchmark price was 7610 yuan/ton, an increase of 2.70%. The highest point in the cycle was 7770 yuan/ton. The international crude oil price fluctuates at a high level, and the cost of toluene continues to support; Downstream demand for disproportionation and blending is lower than expected, with weak support for toluene demand; The high level of port inventory has a bearish impact on the toluene market.
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High international crude oil and external market prices provide support for toluene
The international crude oil price range fluctuated in April, providing continued cost support for toluene. As of April 29th, WTI06 contract settlement is $82.63 per barrel; Brent 07 contract settlement is $87.20 per barrel. Affected by the high volatility of crude oil prices, Asian toluene prices remained at a high level in April, providing support for the domestic toluene market. As of April 29th and May, CFR China’s toluene prices were between $935-937 per ton.
The production of xylene has significantly decreased, and the support for toluene demand has weakened
In April, domestic PX production declined and the market remained stable. In mid to early April, some devices were shut down for maintenance, and PX production decreased from 8.4% to around 6.9%; In mid to late April, some maintenance equipment restarted, and the domestic PX production slightly increased to around 7.1%. It is understood that the 800000 ton/year PX unit of Zhenhai Refining and Chemical will be shut down for maintenance starting from April 4th; The 2.6 million ton/year PX unit of Guangdong Petrochemical was put into operation at reduced load on April 10th; Three sets of PX devices at Zhejiang Petrochemical were reduced in load, and one set of PX was repaired at the end of March; The 1 million ton/year PX plant of Urumqi Petrochemical was shut down for maintenance on April 14th; The Henry Petrochemical 2.5 million ton/year PX unit was shut down for maintenance on April 16th.
Slow recovery of domestic mixed blending demand and weak support for toluene
The recovery of the domestic mixed blending market is slow, and the demand for toluene mixed blending is weak. As of the end of April, the operating capacity of refineries nationwide has slightly decreased to around 6.9.
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TDI demand is weak, and starting production maintains a low level, which weakens support for toluene
The TDI market weakened and declined in April. Downstream demand performance is weak, downstream market entry enthusiasm is not high, and a small amount of follow-up is mainly based on demand. The end market consumption is insufficient, and downstream supply of goods with high prices is flat. Under the leadership of demand, the TDI price trend has decreased.
The impact of port inventory pressure on toluene is relatively empty
The inventory of domestic toluene ports has decreased, and the overall resistance to the upward movement of toluene has decreased. As of April 25th, the inventory of toluene in East China was 71000 tons, and the inventory of toluene in South China was 5000 tons, a decrease of around 4000 tons from the end of March.
Expected decrease in toluene supply due to planned maintenance of equipment in the later stage
The Jin’ao Technology reforming unit was shut down for maintenance in April, and toluene was sold without quantity; Jiangsu Xinhai Petrochemical’s aromatics were shut down for maintenance on April 7th. In the later stage, there are still maintenance plans for toluene mixed xylene units such as Zhenhai Refining, Zhenghe Petrochemical, Dushanzi Petrochemical, and Dalian Xitai in May and June. Overall, the expected decline in toluene supply in the later stage provides some support for the tMarket forecast: According to toluene analysts from Business Society, from a fundamental perspective, international crude oil is currently fluctuating and consolidating, with narrow fluctuations in toluene costs; Secondly, the demand for downstream oil adjustment and disproportionation reaction is lower than expected; The maintenance plan for the toluene unit in the later stage will to some extent alleviate the pressure on the toluene supply surface. It is expected that the toluene market will stabilize and rebound after a slight decline in the later stage.
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