According to the Commodity Market Analysis System of Shengyi Society, the toluene market will first rise and then fall in January 2025, with an overall upward trend. From January 1st to 23rd, the domestic market price of toluene increased from 6050 yuan/ton to 6700 yuan/ton, with a price increase of 10.74% during the period.

In the first half of the month, the overall trend of the toluene market was upward, and trading in the spot market improved significantly compared to the previous period. During this period, the strong operation of crude oil led to an improvement in the atmosphere of the spot market. The overall supply in Shandong region is tight, and the procurement of the oil blending industry is good, which has boosted the mentality of refineries. The factory quotation has been raised multiple times this week.

In the second half of the month, as downstream inventory replenishment intentions decline near the Spring Festival, market purchasing intentions gradually tighten. Due to insufficient demand, the toluene market will experience a pullback in the second half of the month

On the cost side: The international oil price market has risen significantly this cycle, and as of the 22nd, the settlement price of the main contract of WTI crude oil futures in the United States was $75.44 per barrel. The settlement price of the main Brent crude oil futures contract is reported at $79.00 per barrel. During this cycle, crude oil prices have risen significantly. On the one hand, the OPEC+production reduction agreement has been extended until the end of the first quarter, and some oil producing countries are still implementing compensatory production cuts. The United States has increased sanctions against Russia, and there are strong concerns about supply shortages. The supply of crude oil has been supported by favorable factors, leading to a significant increase in crude oil market prices. On the other hand, the instability of the situation in the Middle East still exists, and the arrival of winter cold waves in Europe and America is expected to further boost fuel demand, which is good news for the international oil market.

Supply side: Sinopec’s toluene quotation has been raised multiple times during the cycle. Currently, the company is operating normally, with stable plant production and many products for self use, resulting in stable production and sales. As of January 23rd, East China Company quoted 6700 yuan/ton, North China Company quoted 6700 yuan/ton, South China Company quoted 6650-6700 yuan/ton, and Central China Company quoted 6700 yuan/ton.

Demand side:

On January 23rd, the price of xylene in the petrochemical sales company was temporarily stable, and the current execution price is 7300 yuan/ton. This price is implemented in East China, North China, Central China, and South China. Yangzi Petrochemical, Zhenhai Petrochemical and other units are operating stably and selling normally, with a price increase of 200 yuan/ton compared to December 31st. PX prices have risen both inside and outside the cycle. As of January 22, the closing prices of the Asian xylene market were 856-858 US dollars/ton FOB Korea and 881-883 US dollars/ton CFR China. The price has increased by $44/ton compared to December 31st.

Market forecast: The recent stable to strong trend of crude oil will provide a certain boost to the toluene market. The demand side has performed relatively well recently, and the Shandong region has performed well recently. However, with the downstream procurement intention coming to an end, there is currently a lack of market buying potential. Recently, the inventory of ports in East China has been relatively high on the supply side, and it is expected that there will be some room for downward adjustment in the toluene market in the short term.