Toluene (CAS No. 108-88-3), a core variety in the aromatic hydrocarbon industrial chain, has both chemical raw material and oil blending properties. It is widely used in coatings and inks, pesticides and pharmaceutical intermediates, rubber synthesis, gasoline blending, and toluene disproportionation to produce benzene. As an indispensable basic chemical raw material in industrial production, its price trend is closely linked to related varieties such as crude oil, benzene, and xylene, and is significantly affected by supply-demand games, cost transmission, and industrial policies.
1. Shandong Market: Prices Stopped Falling and Rebounded on Cost & Demand Support
This week, the toluene market in Shandong ended its previous downward trend and rebounded. Externally, disagreements in US-Iran talks kept international oil prices stable above $100/barrel, with prices moving higher, providing cost support for toluene.
2. Price Spread: Toluene-Benzene Spread Remains Wide
The average benzene-toluene price spread in Shandong was about RMB 1,636/ton this week, with HDA processing profits around RMB 866/ton. Last week, the spread averaged RMB 1,777/ton, with profits at RMB 970/ton. Since May, HDA gross margins in Shandong have fallen below RMB 1,000/ton.
3. Toluene-Xylene Spread: Limited Stimulus to Downstream
The average xylene-toluene spread in Shandong was about RMB 137/ton this week, with toluene refiners' average sales-to-production ratio at 120%. Last week, the spread was RMB 116/ton with a ratio of 83%. High gasoline inventories, weak end-demand, and rising toluene prices have further dampened gasoline sector purchasing.
4. Market Outlook
In the short term, the toluene market faces mixed factors:
- Bullish: Severe losses in reformer units provide solid cost support; export window open; planned new benzene production units.
- Bearish: Very limited gasoline consumption; weak procurement interest from fine chemical sectors.
