Toluene demand remained weak in downstream sectors like fuel blending and aromatics, as rising gasoline inventories signalled sluggish market pull. Despite increased production costs from higher naphtha prices, producers faced pressure from elevated inventories and subdued demand. U.S. refineries operated at high capacity, maintaining ample supply. Market sentiment turned bearish as supply outpaced demand, with slow momentum in benzene production further dampening outlook. Looking ahead, scheduled maintenance and hurricane season may disrupt supply in September–October, while November could see easing demand and restored supply balance. Overall, the Toluene market is expected to experience mixed trends in the coming months.
Key Highlights:
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Weak downstream demand: Toluene demand from fuel blending and aromatics production sector remained tepid.
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Slight supply pressure: Feedstock costs increased which presented some slight supply pressure in the market.
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Bearish market sentiment: Ample supply and average demand led to bearish sentiment in the market.
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Mixed Outlook Ahead: Prices are expected to witness mixed outlook in next few months owing to seasonal and supply factors.
The demand for Toluene in the downstream industries including fuel blending and production of aromatics was tepid. According to EIA, production of gasoline increased last week with an average of xx million barrels per day. Distillate fuel production declined in the market by xxx thousand barrels per day last week with an average of x.x million barrels per day. Increasing finished gasoline inventories suggested slow pull from the market which reflected subdued demand for additives like Toluene in the sector. While the...
