For the Quarter Ending March 2024
North America
In Q1 2024, toluene prices in the North American region witnessed a price hike. Inflationary pressures had heightened as the costs of materials like metals and plastics from suppliers, along with increased transportation charges, rose more sharply. In response to OPEC's supply cuts, the Americas, particularly the United States, had increased their supply.
Additionally, oil traders were closely monitoring efforts to negotiate a ceasefire in Gaza and any signs of increased U.S. military involvement in the Middle East. The United Nations trade body had cautioned that escalating attacks on vessels in the Red Sea were exacerbating challenges for shipping routes already affected by conflicts and climate-related issues. The combination of incidents in the Red Sea, geopolitical tensions impacting Black Sea shipping, and the effects of climate change on the Panama Canal had resulted in a complex crisis affecting crucial trade routes.
The demand outlook for toluene and other aromatics had remained strong, with the repercussions reflected in domestic market toluene prices. The improvement had been broad-based, with both the manufacturing and service sectors experiencing accelerated growth. The number of sub-sectors expanding had reached a ten-month high. Manufacturing output had increased notably for the second consecutive month, driven by a renewed rise in new orders for goods.
APAC
During Q1 2024, toluene prices in the APAC region exhibited an overall upward trend, influenced by several factors. Industries such as paints, coatings, solvents, and downstream petrochemicals maintained steady demand, pushing toluene prices higher. Moreover, ongoing construction projects in the region contributed to the increased demand for toluene, further boosting prices. In South Korea, toluene prices experienced significant changes, with a 10% increase compared to the previous quarter in 2024. However, prices decreased by 7% compared to the same quarter last year. Within the quarter, prices rose by 2% from the first half to the second half. By the end of the quarter, the price of toluene CFR Busan in South Korea was USD 860/MT. The pricing trend for toluene in South Korea was positive, with prices consistently rising throughout the quarter. Overall, the APAC region witnessed a positive sentiment in toluene prices for Q1 2024, driven by stable demand from various industries and construction activities.
MEA
Toluene prices in the Middle East and Africa (MEA) region had experienced a significant increase in the first quarter of 2024. This upward trend can be attributed to several factors that have influenced market prices. Firstly, there has been a strong demand for toluene from various industries such as solvents, toluene diisocyanate, and aromatics. This increased demand has put upward pressure on prices. Additionally, supply constraints have played a role in driving up prices. There have been reports of insufficient inventories and limited import volumes, which have created a supply-demand imbalance in the market. As a result, prices have risen to ensure an adequate supply of toluene. Saudi Arabia has seen the maximum price changes in the region. The country's toluene prices have increased by 25% compared to the same quarter last year. The price change from the previous quarter in 2024 was recorded at 9%, indicating a continuous upward trend. Furthermore, there has been a notable price difference between the first and second half of the quarter, with prices increasing by 19%. This suggests that the pricing environment has been positive, with prices consistently rising throughout the quarter. In conclusion, the first quarter of 2024 has been marked by increasing toluene prices in the MEA region. Factors such as strong demand, supply constraints, and price differentials have contributed to this upward trend. The latest quarter-ending price for toluene in Saudi Arabia was recorded at USD 1405 per metric ton, CFR-AL Jubail.
Europe
In Q1 2024, the European toluene market experienced a quarter characterized by complex interplays of supply chain adjustments, geopolitical uncertainties, and economic factors influencing both production costs and market demand. Stockpile availability remained ample across the region, providing some stability against fluctuating import flows and manufacturing demands. This period saw a sustained demand from key end-use sectors such as TDI and other solvent industries, which, while steady, did not lead to significant price hikes due to the balancing effect of sufficient inventories.
Throughout the quarter, European countries continued adjusting their import strategies in response to decreased inflows from the East of Suez, increasingly turning to US imports to ensure supply continuity. This shift was part of a broader strategic realignment in response to ongoing geopolitical tensions in the Middle East, which slightly elevated oil prices and indirectly influenced toluene's production costs.
Rising naphtha prices posed a continuous challenge, increasing production costs for toluene manufacturers and adding pressure to maintain profitability without escalating market prices unduly. This situation was further complicated by impending refinery maintenance across Europe, threatening to tighten toluene supplies and necessitate careful logistical planning and inventory management.
Despite these challenges, the European toluene market managed to avoid drastic fluctuations in supply and demand, thanks in part to manufacturers' adept handling of production costs and supply chain dynamics. The quarter was marked by a cautious optimism, with industry players navigating economic uncertainties and supply risks without severe market disruptions, underscoring the resilience and strategic adaptability of the European chemical sector.
For the Quarter Ending December 2023
North America
In Q4 of 2023, the North American Toluene market plunged owing to several challenges. Firstly, crude oil prices declined due to geopolitical tension between Hamas and Israel and the Federal Reserve's high-interest rates towards the quarter's end. Secondly, the strength of the US dollar against the Euro reduced exports to European countries like the Netherlands.
Additionally, there was a lack of demand from downstream industries such as paint, coating, and solvent, although demand remained relatively steady despite seasonal fluctuations. The USA faced inventory pressure as upstream stocks declined to two-year low levels, and no plant shutdowns were reported during this period. The already bearish market conditions were intensified by seasonally low demand for naphtha, resulting in the lowest cash prices for heavy virgin naphtha (HVN) at the US Gulf coast in a year.
Additionally, weak gasoline pricing further contributed to the overall negative sentiment. The Texas-Mexico crossing resumed operations; however, manufacturers kept a close eye on the market and demand volume before considering any variations in prices. These factors contributed to the quarter-ending price of USD 1024/MT of Toluene FOB Louisiana in the USA.
APAC
In Q4 2023, toluene prices in the APAC region underwent a bearish trend influenced by various factors. Initially, lower production rates and a diminished demand outlook from downstream industries such as TDI, coatings, and adhesives were observed as the quarter came to a close. Additionally, the supply of toluene remained moderate in the region, with domestic refineries maintaining optimal production rates. The demand outlook from downstream industries like paints, coatings, and solvent manufacturing also remained sluggish during this period. South Korea experienced significant price changes, primarily due to moderate supply and low demand from industries such as paints and coatings. Toluene prices in South Korea exhibited a 2% downward trend from the previous quarter, with a price change of -18% for the first and second halves of the quarter. Notably, no plant shutdowns were reported in the region during the quarter. The quarter-end price for toluene CFR Busan in South Korea was recorded at USD 798/MT. In summary, toluene prices in the APAC region were impacted by the global economic slowdown, seasonal winter conditions, and limited market activity, resulting in a bearish trend.
Europe
In Q4 2023, toluene prices in the European region moved southwards and were influenced by various factors, resulting in a bearish quarter characterized by moderate supply and demand. The decline in production was attributed to reduced activities in manufacturing consumer goods and intermediaries. Throughout the quarter, downstream sectors such as TDI, coatings, and adhesives experienced weak demand. The quarter-end saw lower production rates and a diminished demand outlook specifically from TDI, coatings, and adhesives. Trading activity was restricted, and apprehensions regarding supply disruptions in the Red Sea were diminishing. The disruptions had elevated rates, and their influence was anticipated to extend into January. Nevertheless, the presence of the US carrier group was expected to restore normalcy soon. Meanwhile, diesel shipments to Europe from the Middle East Gulf were slowing down, leading Europe to seek diesel from the US. However, this transition was constrained by the elevated US-Europe MR freight rates. The latest recorded price of Toluene FD Antwerp, Belgium, in Q4 2023 was USD 976/MT.
MEA
In Q4 2023, toluene prices in the MEA region remained bearish, primarily attributed to weak demand from end-use sectors such as adhesives, disinfectants, and toluene diisocyanate. The resultant decrease in demand led to a buildup of inventories, exerting additional pressure on prices. Saudi Arabia, in particular, witnessed a continuous drop in toluene prices due to soft buying interest and escalating inventories. Demand from downstream industries like coatings and solvents remained sluggish. The oversupply of toluene, driven by increased imports from low-priced countries like China, contributed to the overall decline in prices. High inventory levels in Saudi Arabia further intensified the downward pressure on prices, with no major plant shutdowns reported during the quarter. The disturbance in the Red Sea might not have a substantial impact on crude and liquefied natural gas (LNG) prices, the redirection of oil shipments could potentially influence spot crude prices. OPEC's primary objective is to optimize revenue from oil exports, a pursuit that occasionally conflicts with the interests of nations reliant on oil imports. Striking a balance between maintaining elevated oil prices, ensuring global economic stability, and contending with non-OPEC producers poses challenges for the organization. The latest recorded price of Toluene CFR-AL Jubail in Saudi Arabia during Q4 2023 was USD 1156/MT.
For the Quarter Ending September 2023
North America
Toluene prices maintained their upward trajectory in the North American market throughout the third quarter of 2023. This price surge was prominently evident in the domestic market of North America and can be attributed to increased cost support from upstream Crude oil, heightened inquiries from the paints and coatings sectors, and improved demand from the derivatives segment. Specifically, in the U.S. domestic market, Toluene prices experienced an increase due to the positive cost support emanating from the upstream Crude oil. Production cuts implemented by OPEC+ exacerbated the supply shortage, with Crude oil reserves in the United States currently hovering around 2% below the five-year average for this time of year. On the demand front, procurement of the product has maintained a moderate pace, particularly from downstream paints, coatings, and solvent manufacturing industries. The demand for Toluene has been on the rise, supported by increasing procurement rates within the downstream paints and coatings sectors. Market participants have also noted heightened construction activities in the region, further stimulating market engagement. As of the end of September 2023, the offered quotations for Toluene FOB Louisiana settled at USD 1296/M.T., reflecting the culmination of these factors in the North American market.
APAC
During the third quarter of 2023, Toluene prices consistently increased in the Asia-Pacific market. This price surge was particularly notable in South Korea, where several factors contributed to the rise. The increased demand from downstream industries, positive cost support from upstream Crude oil, anticipated market activities, and production cuts by OPEC+ were key drivers of this price trend. In South Korea's domestic market, Toluene prices experienced a continuous uptick throughout the third quarter, largely in response to the global upswing in crude oil prices. The production cuts announced by major oil-producing nations such as Saudi Arabia and Russia played a pivotal role in bolstering oil prices, which had been on a consistent rise in the global market during the third quarter. This increase in crude oil prices subsequently intensified the cost pressure on Toluene and its derivatives. Additionally, optimistic financial results from Kansai Industries, a downstream player in the Toluene industry, influenced the positive price trend. The supply chain operations gained momentum due to increased purchases of the product from Asian markets. On the production side, the cost support from upstream Crude oil further pushed up production costs. The downstream demand from the derivatives segment remained strong, driven by active consumer purchases. Notably, the construction and paint industries exhibited increasing demand for Toluene. As of the end of August 2023, Toluene prices FOB Busan were settled at USD 992 per M.T., reflecting the evolving market dynamics and the interplay of these various factors.
Europe
In the European market, Toluene prices exhibited a consistent upward trajectory throughout the third quarter of 2023. This price surge was notably evident in the domestic market of Europe, influenced by several factors, including increased cost support from upstream Crude oil, heightened inquiries from the paints and coatings sectors, and improved demand from the derivatives segment. In the domestic market of Belgium, Toluene prices rose due to the increasing Crude oil prices in the European region. A significant contributor to this uptick was the recent disastrous flooding in Libya, a crucial oil supplier to Europe, which raised concerns about its ability to meet the one million barrels of oil per day demand. Additionally, Brent Crude oil experienced a nearly 7.6% increase in August, exerting positive pressure on the Toluene market in Europe. Despite the gloomy economic outlook that has dominated the European market, driven by Germany's weakened economy and low demand across the continent, the Toluene market demonstrated resilience. Market transactions remained relatively low, with purchases primarily driven by immediate needs. The supply chain operations continued smoothly, and no significant constraints were observed in the region. The demand from the derivatives segment remained robust as consumers actively purchased the commodity, while the construction and paints industries exhibited increasing demand for Toluene. As of the end of September 2023, Toluene prices F.D. Antwerp settled at USD 1312 per tonne, reflecting the complex interplay of these factors in the European market.
Middle East
In the third quarter of 2023, the Toluene market in the Middle East demonstrated a bullish pricing trend due to various factors. The first month exhibited a rebound in the prices amid heavy cost pressure from the upstream Crude oil and feedstock Naphtha due to the production cut announcement and projected interest rate hikes by the Federal Reserve. Come August, the market prices further escalated amid rising crude oil prices, whereas the demand outlook was also positive as the consumer inquiries from the downstream paints, coating, and solvent industry were steady this month. The primary reason is that worries about slowing economic growth and the prospect of supply constraints have overshadowed growing U.S. stockpiles. Saudi Arabia and Russia agreed to extend their agreement to reduce crude oil output by 1.3 million barrels per day until the end of the year, citing a significantly protracted supply gap caused by production cutbacks. As of September 2023, the prices of Toluene were assessed at USD 1386 per metric tonne.0/MT in the week ending
For the Quarter Ending June 2023
North America
The prices of Toluene showed mixed sentiment in the second quarter of 2023. Prices registered a bullish trend in the month of April 2023 due to a positive cost push from the feedstock Naphtha and increasing energy prices. The prices of Toluene registered a growth of 4 percent in the month of April. Demands from downstream Industrial intermediates like Benzene remained stable, while from the consumer industries, the demand remained low due to high-interest rates and inflationary pressures. In the months of May and June, prices of Toluene showed a bearish trend as the decreasing crude oil and Naphtha prices provided negative cost support to the pricing. By the end of June, we observe a price decline of 14.8 percent. Inquiries reveal that imports from Mexico, Canada, and South Korea helped in reducing the price level. Demand from the downstream industries like Paint and cosmetics increased as inflation eased. Supply from the domestic as well as imports were sufficient for inventory levels and the downstream demand. Prices for Toluene FOB Texas were settled at USD 978/MT in the month of June 2023.
APAC
The prices of Toluene showed mixed sentiment in the second quarter of 2023. Prices increased in the month of April 2023 due to a positive cost push from the feedstock Naphtha and increased crude oil prices. Demands from downstream Benzene derivatives industries and consumer industries show positive growth. In China, the downstream demands from polymer industries remained lukewarm. Inquiries reveal that the profit margins of manufacturers declined in order to operate and fulfill the demands. The inventory level remained adequate. China’s PMI fell from 49.8 in April 2023 to 49.0 in June 2023. In South Korea, a similar trend was observed. Inquiries reveal that the weak Chinese recovery and recession in Europe have affected the export performance of the South Korean chemical industry. PMI (South Korea) fell to 47.40, well below 50.0. In the months of May and June, the prices of Toluene showed a bearish trend due to a negative cost push by the feedstocks and energy prices. The demand from the downstream benzene derivatives producers remained weak as Europe went into a technical recession and suppressed consumer sentiments in Europe and North America. By the end of June 2023, we see a moderation and stabilization of prices in Asia Pacific due to OPEC+ production policy cuts and positive price support to Toluene. Prices of Toluene Ex Shanghai were settled at USD 999/MT for the month of June 2023.
Europe
The prices of Toluene showed mixed sentiment in the second quarter of 2023. Prices increased in the month of April 2023 due to a positive cost push from the feedstock Naphtha and increased crude oil prices. In the German market, the demand for downstream benzene derivatives remained suppressed due to inflationary pressure and weak macroeconomic parameters. Inquiries reveal that manufacturers were operating at 60 percent of their capacity and lower profit margins amidst the EU economic crisis. PMI manufacturing fell to 38.8 in the month of June in Germany. In Belgium, a similar trend was observed in the month of April 2023. In May and June 2023, the prices of Toluene showed a bearish stance due to a negative cost push from the feedstock and energy prices. The demand remained suppressed as inflationary pressure and recession began in Europe. Investors sentiment remained bearish. The demand from downstream industries for Benzene derivatives declined further. Imports from the United States, China, etc., helped in moderating the price. Inquiries reveal that manufacturers are operating by a very thin margin, and any further price drop may significantly impact Europe’s industries. Prices of Toluene FD Antwerp were settled at USD 1096/MT in the month of June 2023.
For the Quarter Ending March 2023
North America
In the first quarter of 2023, the market prices of Toluene in the US domestic market rode a downward trajectory in the first two months and later stabilized in March. Throughout this quarter, the cost support from the upstream crude oil fluctuated, and the demand outlook remained uncertain. In January and February, the prices dropped amid sluggish procurement rates in the downstream paints and solvents industries and the decline in freight charges; thus, the pricing trend progressed in a downtrend. In March, the supply and demand gap of Toluene narrowed down, and the demand from the downstream derivatives segment and other related industries rose slightly, stabilizing the market dynamics of Toluene in the US market. Thus, the prices of Toluene FOB Texas settled at USD 1125 per tonne at the end of the first quarter.
APAC
In the Chinese domestic market, the overall market sentiments for Toluene remained bullish in the first half of Q1 2023. In the first two months, the prices increased as the manufacturing activities improved, the covid restrictions eased off in the region, and the demand from the downstream benzene, xylene, and other derivative industries escalated. The domestic manufacturers operated at the usual pace, and adequate availability of upstream crude oil ensured stable production rates, thus strengthening the market fundamentals for Toluene. In March, the overall supply and demand dynamics for Toluene stabilized amid adequate inventories in the region, and a firm demand outlook was observed from the downstream paints, coatings, and solvents industries. Consequently, the market prices of Toluene Ex-Shanghai settled at USD 1041 per tonne at the end of the first quarter.
Europe
In the European market, the prices of Toluene showcased mixed market sentiments in Q1 2023. The market prices of Toluene surged in January amid a rise in the procurements from the downstream solvents, paints, and coatings industries in the region, whereas the cost support from the upstream Crude oil firm and abundant supplies were maintained to meet the overall demand from the end-use industries. In February, the market prices stabilized in the region as oversupplies of Toluene hampered the production activities in the region. In the last month, the prices dropped owing to a decline in production costs as TTF natural gas prices slid down and the demand from the downstream solvents industry remained suppressed in the region. Thus, at the end of the first quarter, the prices of Toluene FOB Hamburg settled at USD 1146 per tonne.
For the Quarter Ending December 2022
North America
In the US market, Toluene prices have demonstrated mixed market sentiments in Q4. The prices first improved and then fell in the second half of the fourth quarter. The cost support from upstream raw materials was limited, and the pricing dynamics of Toluene progressed in a downtrend. The freight rate across the US gulf coast and Asian markets was also relatively low, prompting downward pressure on the price realizations of Toluene in the US market. Furthermore, the demand dynamics of toluene demand were adversely affected by the low market transactions from the downstream solvent industries. As a result, the traders lowered their offers to maintain a balance between supply and demand. Therefore, Toluene FOB Texas prices were concluded at USD 1207 per ton at the end of the fourth quarter.
APAC
In the fourth quarter of 2022, Toluene prices have remained on the lower end in the Chinese domestic market. The cost support from upstream Crude oil was weak. In addition, the offtakes from the downstream paints and coatings industries remained under pressure as procurement from the international market was sluggish. In addition, the price realizations of coal also weakened, pressuring the manufacturing costs of Toluene. In mid-Q4, the fresh COVID cases impacted manufacturing across the nation. Logistics have been disrupted by Beijing's "zero-covid" policy, and ocean shipment volumes have decreased, imposing a downside risk to the price realization of Toluene. Consequently, Toluene Ex Shanghai prices were assessed at USD 928 per ton in December.
Europe
Prices for Toluene in the German market decreased throughout the fourth quarter of 2022. Manufacturers cut their prices in Q4 because of the continued lack of improvement in demand from downstream solvent industries. The Toluene market was negatively impacted by the low market transactions. With rising inventory levels, pressure has grown on the supply side. Furthermore, the market value of upstream crude oil has fallen, putting pressure on the Toluene market. The end-use industries' purchasing power has been depleted by record-high inflation. Additionally, the purchase from the downstream Benzene market was insufficient and unable to sustain the upward trends in Toluene prices. Thus, Toluene FOB Hamburg prices were settled at USD 1016 per ton at Q4-end.
For the Quarter Ending September 2022
North America
Toluene prices fluctuated in the North American region throughout quarter III of 2022 on the back of a decline in orders from the downstream processors. Initially, the product prices plunged due to the reduction in demand from downstream industries, which increased the inventory levels. However, from the mid-quarter, the prices stabilized, and product prices rose slightly on the back of increased orders from downstream products from the European importers. On the contrary, the production costs decreased due to a decrease in upstream Natural gas prices due to increased availability and stability in European LNG demand. Consequently, after witnessing a plunge of 2.5% in the previous quarter’s prices, Toluene prices in the USA settled at USD 1166/MT at the end of Q3.
Asia
Toluene price trend fluctuated in Asia during Q3 of 2022. During the first two months, Toluene prices decreased consistently in the region due to declined orders from domestic downstream industries. Major producers in China cut down operational rates on Government’s instructions due to heat waves in summer. At the same time, depreciation in currency values and economic slowdown further affected domestic manufacturing activities. While in the final month of the quarter, the price trend revived in some Asian countries like India and was seen stable in Thailand and South Korea, the price movement persisted in China. At the end of Q3, Toluene prices in China and India settled at USD 1099/MT and USD 1166/MT, respectively.
Europe
A shifting price trend of Toluene was seen in the European region during Q3 of 2022. Initially, the product prices decreased negligibly during the first month of the quarter due to high upstream costs amid the increase in inflation rates and a decrease in demand from TDI producers. However, in the second month, the price trend shifted in Europe. Toluene prices nosedived on the back of declined demand by the downstream industries as key downstream manufacturing facilities were down due to the rationing of input supplies. Because of this, the product inventory levels rose, and prices were negatively affected. After witnessing a decrease of 2.7% against the Q2 values, Toluene discussions in Germany settled at USD 1138/MT.
For the Quarter Ending June 2022
North America
Toluene prices have been rising throughout the second quarter of 2022, supported by strong export demand and upstream crude oil prices on the global market. The upstream crude oil supply scarcity has also impacted the price increase for Toluene. All the crude derivative commodities' prices are affected by variables such as robust demand, lower-than-anticipated supplies, and continuing geopolitical tensions between Russia and Ukraine. In addition, Toluene's demand in the downstream paint and rubber industries continued to have a strong need for Toluene during this quarter.
Asia-Pacific
The Asia Pacific region has had conflicting market attitudes for Toluene during the second quarter of 2022. Due to the plentiful supply and the weak demand from the construction and downstream cosmetics industries, toluene prices fell in China in April. In addition, the cost of raw materials, particularly benzene and xylene, has been significantly impacted by the decline in crude value, which has lowered the price of Toluene across the regional market. Besides, the ongoing Covid shutdown in some cities of China has impacted the market sentiments of Toluene. However, Toluene prices have increased since the middle of the quarter as downstream output has recovered after the May Day holidays. The market for Toluene was offended by the rise in toluene demand to produce downstream derivative benzene. The pricing of Toluene has also benefited from significant purchasing and selling activity across the regional market. A significant factor in the increase in toluene prices is undoubtedly the skyrocketing upstream crude prices. The market for Toluene also saw an uptick because of the increase in transportation freight costs brought on by the increase in fuel prices.
Europe
In the European market, Toluene prices showed an upward trend in the second quarter of 2022, supported by an increase in regional market demand. Also, the high demand for ink, paints, and adhesives laid the foundation for the price hike. In addition, the upstream crude supply shortage also supported the price increase. Additionally, the price of Toluene has increased due to the inflation in energy prices brought on by geopolitical unrest and the necessity of sanctions on Russia's oil embargo. The toluene market has increased further due to strong domestic demand and increased output. Moreover, the rising demand for Toluene in producing its derivative toluene diisocyanate has also contributed to an increase in toluene prices.
For the Quarter Ending March 2022
North America
During the first quarter of 2022, Toluene prices skyrocketed owing to the rising demand from the downstream paints, adhesives, glues, and so on. In addition, the disruption caused by the Russia-Ukraine conflict resulted in the upsurge of upstream Crude prices and feedstock Benzene, impacting the Toluene market. Moreover, the reroute in shipments after the Russian invasion delayed the supplies inflicting the Toluene price trend. Besides, soaring fuel prices and freight charges also affected the Toluene market. Furthermore, the energy crisis has fuelled the prices after US sanctions on Russian gas. Henceforth, the cost of Toluene in the USA settled at USD 1225 per MT in March 2022.
Asia Pacific
Toluene prices witnessed an upward trajectory in the first quarter of 2022. As the upstream crude price witnessed an upsurge due to the Russia-Ukraine conflict resulting in the price hike in the Toluene market. Moreover, the disruption of trade and port congestion in China caused by the resurgence of COVID impacted the Toluene price trend in the regional market. Also, the hike in demand for the downstream paint, ink, and adhesives has severely affected the price of Toluene to grow high. In addition, the rising freight charges have boosted the Toluene market in the region. Thus, the CFR prices of Toluene in India settled at USD 815 per MT by the quarter ending March 2022.
Europe
In the first quarter of 2022, Toluene prices showcased an upward movement as a result of an upsurge in demand from the regional market. The high demand for ink, paints, and adhesives laid the foundation for the price hike. In addition, the geopolitical tension inflicted the upstream crude, which severely affected the petroleum feedstocks impacting rail and road transportation with congestion across black sea. Furthermore, the continuation of Europe's energy crisis following the suspension of Russian gas after their invasion of Ukraine led to a significant price increase. Hence, the FOB prices of Toluene in Germany were assessed at USD 1150 per MT in March 2022.
For the Quarter Ending December 2021
North America
In the fourth quarter of 2021, Toluene prices witnessed a downward trajectory backed by the ample supply of the product as the major producers such as Dow and ExxonMobil had resumed their Toluene production in September end. The demand outlook for Toluene and its derivatives remained stable through the quarter. Moreover, reasonable upstream Benzene prices due to dip in the Crude oil values as well as narrow demand also supported the pricing trend of Toluene in the region. Additionally, in December, buyers did not seem interested in stocking piles ahead of year end that further kept the prices low. Hence, FOB Texas average Toluene prices settled at USD 853/MT in December. However, in the upcoming month Toluene market sentiments may improve with the rise in its values.
Asia
In Asia, Toluene market sentiments varies from country to country during the fourth quarter of 2021. In China, Toluene prices witnessed fluctuations in this quarter backed by the volatility in upstream Benzene values and demand dynamics. Thus, Toluene FOB Shanghai prices rose to USD 1022/MT from USD 993/MT from October to November while in December prices tumbled down to USD 915/MT because of lull market activities and dull demand fundamentals. Moreover, In South Korea, Toluene fundamentals have continued to be modest in line with upstream crude oil values, influencing the pricing trend of Toluene in China. In Indian market, Toluene prices showcased a downward trend in Q4 on the back of ample supplies and ease in the feedstock Benzene values. However, the demand outlook was firm in October and November with enough enquiries due to festive season while in December the demand from the downstream manufacturers narrowed down. Thus, Ex Kandla Toluene prices were assessed at USD 855.9/MT in December registering a dip of USD 115.6/MT since October.
Europe
In Q4 2021, Toluene market appeared to be bullish backed by the supply tightness and firm demand from the downstream TDI manufacturers across the region that kept the pricing trend high throughout the quarter. Supply restrictions and lower imports from the Asian countries in effect of surging covid cases also exerted pressure on local traders. Moreover, production cuts as a repercussion of natural gas crisis along with constraint availability on spot basis also supported the inflation in the Toluene prices. Hence, FOB Hamburg Toluene prices were assessed at USD 910/MT in December witnessing a rise of USD 75/MT since October.
For the Quarter Ending September 2021
North America
During the third quarter of 2021, the prices of Toluene remained firm in the North American region. During the last week of September, leading companies like Dow and ExxonMobil resumed their production of Toluene which led to the increment in the supply in the latter stages of Q3. Stagnant demand in Q3 2021 was observed however due to unplanned shutdowns prices remained fairly stable. Demand from the downstream market was still recovering hence prices remained rangebound to downwards during the quarter. The overall market prices of Toluene stabilized towards the end of the quarter FOB Texas offers were assessed at USD 990/MT in September.
Asia Pacific
Toluene prices demand reported positive indications in the domestic demand as industries increased their plant operating rates in the third quarter of 2021. Toluene prices in the domestic market witnessed a marginal climb, reaching USD 824 per MT in the week ending 9th July due to the prominent recovery in the buying interest. However, the hike in prices has been lesser than the expected due to the consistent ease in values of upstream crude. A consistent rise in Toluene prices was observed during the month of July, bolstered by a prominent recovery in industrial activities post decline in pandemic cases in India. It was reported that the consumption of petrochemicals in the country escalated after Indian state governments laid off the movement restrictions from their respective states, which eventually led to the increment in the consumption of Toluene in India.
Europe
The overall market of Toluene experienced mixed sentiments in the third quarter of 2021 in Europe. In the month of September, prices fell alongside the crude oil market. The downstream demand remained slow and overall trading was subdued in early September, which affected the prices of Toluene during the quarter. In Germany, the prices of Toluene witnessed a downtrend as the FOB Hamburg prices fell from USD 805/MT to USD 755/MT in the third quarter.
For the Quarter Ending June 2021
North America
Toluene supplies in the North American region improved considerably compared to the previous quarter with sharp pickup in the production rates as the petrochemical players strategize to make up for the supply gap created by the polar storm Uri. Increased offtakes by the downstream players improved the production rates for Toluene. Demand observed significant growth from the downstream paints and coatings, solvents and several other industries as the region witnessed seasonal hike in building and construction activities in the second quarter. Several spot buyers were observed procuring large orders to replenish the inventories ahead of the upcoming hurricane season in the US. Furthermore, trading sentiments in the Toluene market balanced the supply demand dynamics in the North American region. Hence overall market prices stabilized with FOB Texas offers assessing at USD 845 per tonne in June.
Asia Pacific
Toluene supply witnessed constraints in the Northeast Asian region due to scheduled turnarounds at the Kumho Line 3 in South Korea and Mitsui Chemicals plant in Japan during the second quarter. In China, the government imposed the consumption taxes on the imported heavy aromatic commodities, as a ripple effect the pricing trend in the China’s domestic market measured a significant spike towards H2 of the quarter. FOB Shanghai Toluene prices settled around USD 740 per tonne in June. Demand fundamentals remained strong across major countries in Asia-Pacific as the downstream paints & coatings sector along with construction sector measured increase in consumption levels.
Europe
Toluene supply was tight to balanced in the European region owing to the delay in resumption of operations at BASF Ludwigshafen plant in Germany. However, better inflow of product volumes from the US enhanced the supply outlook. Demand continued to remain in the uptrend due to rising consumption from downstream paints and coating industries amidst the seasonal hype from the building and construction. Toluene pricing trend observed a marginal uptrend on the back of spike in demand throughout the region.
For the Quarter Ending March 2021
North America
The supplies were tight during Q1 2021 as various plants remained shut for maintenance related work during the first half of the first quarter. During mid-February, freezing weather conditions disrupted the production lines in the US, which resulted in increased spot prices in the domestic market. The demand surged from the downstream sectors such as TDI and gasoline blending. However, hiked prices and supply disruptions aggravated the domestic buyers which turned more flexible towards the Asian supplies. FOB Texas Toluene prices were recorded at USD 910 per MT, showing a spike of 3% on month-on-month basis in March.
Asia-Pacific (APAC)
Toluene supplies surged in the north-eastern region, whereas supplies in southeast Asia remained balanced during the fourth quarter of 2021, as the addition of new capacities in China increased the production. However, major producers in the region turned to meeting the demand from the western hemisphere rather than southeast Asian countries for better netbacks in revenue. The demand in the APAC region remained stable to tight throughout the quarter. Constrained availability and resilient demand surged the FOB Korea price of Toluene to around USD 680/ton in March 2021.
Europe
During Q1 2021, Toluene supplies were balanced in the European region, as the consumption declined in the region due to imposition of fresh lockdowns, restricted mobility and restrained economic activity, leading to the downfall in demand. Due to minimal transporting activities consumption from the gasoline blending sector declined in the region. Surging spot prices of Toluene in the US, widened the arbitrage between US and Europe, hence the trading focus shifted towards the APAC suppliers.
For the Quarter Ending September 2020
North America
Discussions in US Toluene market remained mixed amid global oversupply concerns from eastern countries in contrast to the forced turnarounds in several Toluene plant in US Gulf Coast due to the series of seasonal hurricanes. Although demand for Toluene witnessed a gradual pick up due to revival in the transportation industry, it was certainly not enough to recover the spreads with its downstream commodities. Reaching the plateau of the pandemic, several producers continued to reduce their operating rates while others relied on the export demand amid a prudent economy recovery
Asia
Asian Toluene Market witnessed dented consumption against the backdrop of dull buying momentum amidst lackluster downstream demand as the market in various countries failed to regain the lost momentum after the outbreak of Coronavirus. High inventories of Toluene in China pressured local traders to channelize their material to the export market, thereby directing the supply to Southeast Asia. The situation eased with spate of maintenance turnarounds and resumption delays in several Northeast Asian plants in early September as producers undertook a wait and see approach amid fears of further loss in revenues due to volatile crude prices and market uncertainties. Prices of Toluene averaged around USD 637 per MT in the Southeast Asian market in the period between July to September.
Europe
Subdued downstream consumption coupled with muted spot activities dwindled the market fundamentals of Toluene in the European region. Producers already hurt by the squeezed profit margins reduced their operating rates in the second half of third quarter in order to balance the overwhelming supply. In addition, several turnarounds at downstream TDI plant further stalled the demand for the product in the region. The quarterly rise coming from favorable seasonal demand had insignificant impact on the petrochemical market struggling with the repercussions of the lockdown implemented in the previous quarter. Throwing light on the tumbling fundamentals, Northwest Europe’s petrochemical index registered a fall of around 5% for Toluene prices between July to August.
