According to the Commodity Market Analysis System of Shengyi Society, the toluene market first rose and then fell in July 2024. From July 1st to 31st, the domestic toluene market price fell from 7540 yuan/ton to 7390 yuan/ton, with a price drop of 1.99% during the period and a cumulative decrease of 150 yuan/ton.

In the first half of the month, the toluene market saw a slight increase, mainly driven by the good performance of gasoline blending. During this period, the trend of cost oil prices fluctuated slightly, but downstream gasoline blending enterprises actively entered the market, with good transaction performance and low inventory levels in the factory. The export performance is also good, with a significant decline in incoming goods from the East China region and tight port supply. Driven by favorable supply and demand, the market atmosphere has improved, and the toluene market has slightly risen.

Late of the month: The overall toluene market is weak, with market prices fluctuating downwards. Supply remains tight this week, and refinery inventories are generally running at a low level. On the demand side, the downstream purchasing intention is low, and the intention to receive goods is insufficient, which has a certain drag on market sentiment. The focus of market negotiations in various regions slightly declined during the week, and downstream companies maintained their demand for replenishment, lacking support from the demand side. The toluene market cautiously retreated, and the overall market atmosphere was weak

On the cost side: In July 2024, the crude oil market first rose and then fell, with an overall wide decline. As of July 29, the settlement price of the main contract of WTI crude oil futures in the United States was $75.81 per barrel, a monthly decline of 6.85%. The settlement price of the main Brent crude oil futures contract was $79.05 per barrel, a monthly decrease of 6.83%. The crude oil analyst of Shengyi Society believes that on the one hand, the easing of the geopolitical situation is bearish on the crude oil market. In addition, the strengthening of the US dollar has affected economic activity in the United States due to hurricanes, putting pressure on crude oil demand and causing signs of a slowdown in US crude oil exports. On the other hand, there are also signs of slowing economic growth in the Eurozone and China, especially the decline in China’s crude oil imports, which has had a negative impact on the crude oil market. Overall, the crude oil market has declined during the cycle, with a negative rate of change in crude oil. Looking at the future: Currently, geopolitical instability continues to affect the market, OPEC+’s production reduction stance is firm, and the traditional peak season in the United States still holds positive news. Under the influence of both supply and demand, oil prices will continue to maintain a range oscillation pattern.

Supply side: Sinopec’s toluene quotation has been lowered multiple times during the cycle, but there are slight differences in the amplitude of each underground adjustment. At present, the enterprise is operating normally, the production of equipment is stable, the products are mostly for personal use, and the production and sales are stable. Among them, the East China Company quoted 7350 yuan/ton, the North China Company quoted 7350 yuan/ton, the South China Company quoted 7450-7500 yuan/ton, and the Central China Company quoted 7400 yuan/ton.

Demand side: The external market for xylene continues to decline, and the rigid demand support for toluene is relatively weak

On July 31st, Sinopec announced the settlement price for xylene in July 2024, which was 8550 yuan/ton, a decrease of 120 yuan/ton from the settlement price in June 2024 and a decrease of 350 yuan/ton from the listing price in July. The PX price continued to decline both inside and outside the cycle. As of July 30th, the closing price of CFR China was $993/ton, which was $1044/ton at the beginning of the month and a cumulative decrease of $51/ton.

During this cycle, the price of toluene in Asia’s foreign markets fluctuated, with the FOB South Korean closing price of 851-853 US dollars/ton as of July 30th, and an increase of 7 US dollars/ton during the cycle; The closing price of CFR China in August is 884-886 US dollars per ton, with a decrease of 46 US dollars per ton during the period.

Market forecast: The recent trend of crude oil on the cost side is weak, and the support on the cost side is weak. The maintenance of the toluene unit in terms of supply is gradually coming to an end, and the market expects that supply will resume in the future. In terms of demand, as August approaches, the market expects inventory demand to gradually recover with the “Golden September and Silver October” and future holidays. The toluene market will also enter a period of active trading, which still provides some support for market sentiment. Overall, the toluene market is mixed with negative and positive factors, and it is expected that the market will mainly experience narrow fluctuations in the short term. In the future, the focus will be on the impact of equipment resumption on market supply.