European Toluene Market Holds Steady Amidst Rising Oil Prices
European Toluene Market Holds Steady Amidst Rising Oil Prices

European Toluene Market Holds Steady Amidst Rising Oil Prices

  • 26-Mar-2024 4:08 PM
  • Journalist: Jacob Kutchner

Hamburg (Germany): Toluene prices in the European market remained stable despite the ongoing increase in Brent crude oil and naphtha prices in the regional market. Manufacturers of toluene are striving to maintain a balance between supply and demand in the domestic market. The production cost of toluene is directly influenced by the overall cost of naphtha and crude oil prices in the domestic market. In the last two months, the global market has seen turbulence in crude oil prices, causing fluctuations in naphtha prices and greatly affecting the final prices of toluene. In the week ending March 22nd 2024, toluene prices were observed at USD 1160 per MT, FOB Hamburg.

The Eurozone's private sector came close to stabilizing this month, driven by a more pronounced return to growth in services. However, there remains a disparity between a stronger Southern Europe and ongoing weakness in France and Germany.

Flash Eurozone Composite Purchasing Managers’ Index (PMI) data for the month indicated that business activity in the currency bloc strengthened to 49.9, nearing the threshold for growth after over a year of contraction. A PMI score above 50.0 indicates growth.

The improvement in the Eurozone's private sector was mainly due to a surge in private sector demand, with the industry's PMI rising to 51.1 from 50.2 in February. Despite the slow pace of improvement in Europe's manufacturing sector, the rate of decline in order book volumes decreased.

The expanding tech sector is creating difficulties for the construction industry, which is already grappling with labor shortages. In Europe, these shortages have been linked to various factors, including the impacts of the COVID-19 pandemic, greater demand driven by decarbonization initiatives, increased inactivity rates among an aging population, and the growth of high-tech industries. These factors combined govern the final prices of toluene in the regional market.

As per the Employment and Social Developments in Europe report, the existing labor shortages in the construction sector are nearly three times higher than they were ten years ago.

The primary driver of the fillers and pigments market will be the growing demand from the architectural coatings and industrial coatings sectors. Additionally, there is steady demand for these products in the aerospace, corrosion protection, maritime, and packaging industries, which is projected to remain stable in the future.

New orders and backlogs for Toluene have declined, along with decreases in production and weakening demand. Both exports and imports increased, and there was a slowdown in supplier deliveries. ChemAnalyst anticipates that toluene prices in the European market might accelerate in the coming week. This prediction is linked to rising inflation rates and significant domestic production costs for Toluene.

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