Global Toluene Prices Slump Amidst Bearish Downstream Demand
- 10-Aug-2022 3:25 PM
- Journalist: Bob Duffler
The rising heat of the recession and inflation has adversely affected several commodity prices, including Toluene. As per the latest insight, Toluene prices have plunged globally. The primary factor for the Toluene price decline is the muted demand and weak cost of the raw material.
After a strong rebound from COVID, the Chinese manufacturers are shocked to find that global market demand is slowing. Also, poor trading activity was caused by a lack of demand from international and regional markets. Furthermore, sea freight costs from China to Europe are falling due to a drop in consumer demand. As a result of the product's widespread availability, manufacturers were forced to negotiate the price of existing products. In the wake of international upstream crude oil prices decreased to US$95~100 per barrel amidst sluggish demand, which negatively impacted the price trend of raw material Benzene and Xylene has the other facets for the Toluene price drop in the domestic market. Hence, as a result, Toluene Ex-Mumbai prices were offered at INR 91900/MT in the week ending 5th August.
On the other hand, growing speculation around a US recession has intensified in the last couple of months, diminishing the demand from the consumer end. Also, the US is the major importer of Toluene from Europe; thus, the prices of the imported cargoes from Europe, i.e., the Netherlands, were weak, which ushered in the Toluene price fall in the US market. Hence, as a result, Toluene FOB Texas prices were quoted at USD 1520/MT in the preceding week. Similarly, in the European market, lacklustre demand from the construction and solvent industries resulted in the price drop of Toluene in the regional market. Moreover, the tight supply of natural gas is slowing down the production activity, further affecting Toluene prices across Europe.
According to the ChemAnalyst estimation, "the prices of Toluene will likely follow the downward trend in the global market. At the same time, the raw material price will be expected to decline. Meanwhile, demand from the end-user construction and solvent industries must remain fragile."