Cargoes and product shortage likely to change the Toluene market in the Asia-Pacific region

Toluene's price in the Asia-Pacific region is witnessing a marginal rise in the week ending 22nd April, 2022. Plant shutdown in China, upstream crude prices followed by Taiwan's force majeure on Toluene cargoes are the major factors that is affecting the Toluene market.

The Asian market has slowed the buying activities of Crude from Russia after Russia invaded Ukraine, resulting in a crude oil price increase. The rising crude prices simultaneously increased the Toluene market, as it's a direct derivative of Crude oil. Furthermore, Sinopec's Hainan refinery, closed for maintenance from 15th March to 10th May, stopped exporting upstream crude oil in April, impacting the Toluene market.

Toluene is one of South Korea's most important exports to China and India. The rising demand from the downstream adhesives, paints, and leather tanning industries rose due to the rapid urbanization, causing the price of Toluene to increase. While China's imports fell as a result of the port congestion, it prompted other Asian countries to seek supply from South Korea, which kept the Toluene market on a favourable price trend.

Despite the rising COVID cases and lockdown restrictions in China, Toluene prices grew due to the gasoline price rise in Shandong. Despite the fact that China has ample supply, the transport restrictions and the lack of vessel availability to carry the cargoes have positively supported Toluene's price in the regional market. Furthermore, Taiwan CPC's declaration of force majeure on Toluene cargoes for loading in April resulted in a shortage of product availability in the Asia-Pacific region. As a result, on 24th April, the price of Toluene increased to USD 1124 per MT.

According to ChemAnalyst, "Toluene prices are expected to rise in the Asian market as the shutdown in refineries might continue the following week. Crude oil prices are likely to rise owing to the Russia-Ukraine war. Besides, China's lockdown may result in a tight supply of the product in the regional market, pushing up Toluene prices even higher. Furthermore, the continuing shortage of cargoes may result in an upward trend in the Toluene market."