India’s Mineral Turpentine Oil (MTO) market moved decisively lower in January 2026, pressured by abundant supply and muted downstream demand. Early January showed structurally long domestic availability with comfortable trader inventories and steady refinery operating rates. Mid-month, BPCL's transfer-price revision intensified spot-market pressure, while uninterrupted overseas inflows and improved port discharge sustained ample import coverage. Post-festive destocking and cautious pre-budget spending restrained buying appetite across coatings and related solvent applications, leaving buyers in a strong negotiating position and prompting further spot discounts. Downstream demand weakness was broad-based, with decorative paint and coatings, the largest end-use for MTO, soft as manufacturers deferred purchases; printing inks and packaging adhesives producers also scaled back procurement. The Ex-Mumbai benchmark declined by a mid-single-digit percentage, echoing the broader demand-led correction across solvent segments. Supply-side dynamics remained favorable for buyers, though upstream signals were mixed. Analysts expect continued modest downside into early months, with a tentative mid-year recovery and upside if upstream indicators firm.
India’s Mineral Turpentine Oil (MTO) market remained under sustained pressure throughout January 2026, reflecting a combination of abundant supply and cautious downstream demand. The month opened with a structurally long MTO position in the domestic market, as refiners operated at steady rates and trader tank inventories across key storage hubs were reported at comfortable levels. This ample availability limited sellers’ ability to defend premiums and created a competitive spot environment from the outset.
As the month progressed, pricing pressure intensified following a downward adjustment in refinery transfer values, which directly influenced spot benchmarks. The revision signaled weaker domestic fundamentals and encouraged traders to align offers lower in order to stimulate movement. At the same time, overseas MTO inflows continued without disruption. Smooth vessel scheduling and efficient port discharge operations ensured consistent replenishment of import cargoes, reinforcing the perception of surplus supply. With both domestic production and import coverage running seamlessly, the MTO market lacked any immediate tightening catalyst.
Demand-side dynamics offered limited relief. Decorative paints and coatings, the largest consumption segment for MTO, recorded subdued offtake as manufacturers focused on clearing finished-goods inventories accumulated during the festive period. Procurement teams largely adopted a hand-to-mouth strategy, prioritizing working-capital discipline amid cautious spending patterns. Similarly, printing ink and packaging adhesive producers moderated fresh buying interest after earlier stock building, reducing incremental drawdown from the MTO market. This broad-based softness across solvent-linked sectors translated into weaker negotiation power for sellers and sustained discounting in spot transactions.
Upstream cost signals provided little immediate support. Although global crude benchmarks showed intermittent firmness, feedstock conditions for MTO production remained broadly stable, limiting the scope for meaningful cost pass-through. In an oversupplied environment, buyers resisted upward adjustments, and refiners were compelled to maintain competitive positioning to preserve offtake volumes. Consequently, MTO prices trended lower through the month despite the absence of major logistical or regulatory disruptions.
Looking ahead, the near-term outlook for the MTO market remains cautiously soft. Seasonal factors, including post-fiscal procurement normalization and slower early-year construction activity, are expected to restrain solvent consumption in the coming weeks. However, a potential rebound in coatings demand ahead of the pre-monsoon period or any sustained firmness in upstream feedstock markets could gradually stabilize MTO fundamentals. Market participants are advised to closely track refinery transfer pricing policies, import flow patterns, and downstream restocking behavior, as these variables will continue to shape the trajectory of India’s MTO market in the months ahead.
