Demand Improves, Toluene Market Rises

The oil blending industry in Shandong Province had good demand this week and actively entered the market for purchases. Later, as toluene prices continued to rise, downstream enthusiasm for chasing high prices weakened, and market negotiations turned weak in the latter part of the week. The negotiation atmosphere in East China and South China was acceptable this week. As prices rose, downstream inquiry enthusiasm began to decline.

By the weekend, the market performance was relatively stable, and the toluene market fluctuated at a high level.

Cost side: The crude oil market rose first and then fell in this cycle, and it rose overall.

As of May 15, the settlement price of the main contract of US WTI crude oil futures was US$61.62/barrel. The settlement price of the main contract of Brent crude oil futures was US$64.53/barrel.

Supply side:

Sinopec's toluene enterprises are operating normally, the production of the equipment is stable, the products are mostly for self-use, and the production and sales are stable.

As of May 16, the East China Company quoted 5,300 RMB/ton, the North China Company quoted 5,300 RMB/ton, the South China Company quoted 5,300-5,400 RMB/ton, and the Central China Company quoted 5,400 RMB/ton.

Demand side:

On May 16, Sinopec Sales Company's paraxylene price was temporarily stable, and the current implementation price was 6,700 RMB/ton. East China, North China, Central China, and South China all implemented this price. The equipment of Yangzi Petrochemical and Zhenhai Petrochemical is operating stably and the sales are normal.

It was increased by 100 RMB/ton compared with May 9. As of May 15, the closing price of paraxylene in the Asian market was 828-830 US dollars/ton FOB Korea and 853-855 US dollars/ton CFR China.

Market Forecast: The recent macro market performance is good, crude oil prices are generally upward, and the toluene market has some support. From the supply and demand perspective, the recent demand for oil blending industry is good, and toluene is actively purchased, which has driven the recent market upward, but as prices continue to rise, the downstream enthusiasm for chasing high prices has decreased, and the momentum for continued upward movement is insufficient. There has been little change in the supply side recently.

Overall, the toluene market currently has limited support, and it is expected that the market will fluctuate in a narrow range in the short term.