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[Industry Focus]：Analysis of Toluene Market in China: Crude Oil Shock and Game between Supply and Demand

Read： 238 Time：6months ago Source：百川盈孚

Recently, China toluene the market has experienced many price fluctuations, and the reasons behind it are closely related to the changes in international oil prices and supply and demand. This article will analyze these factors in detail and predict the future trend of the toluene market.

1. Market Background Review

at the beginning of the month, with the continuous decline of international oil prices, the toluene market was under greater pressure, and the mainstream price fell slightly to 6975 yuan/ton. On the eve of the Spring Festival, although market participants were optimistic about the market outlook and the price pushed up to 7065 yuan/ton, the successive departure of the downstream market made actual transactions difficult. After returning from the holiday, the rise in international crude oil prices has brought support to the toluene market. Coupled with the impact of supply-side maintenance news, the price has risen to 7385 yuan/ton again. However, the downstream market acceptance of high prices is not high, the market is not active.

2. current market situation

as of noon on February 28, the prices of toluene in East China, South China and North China were 7350-7420 yuan/ton, 7250-7330 yuan/ton and 7050-7100 yuan/ton respectively. The current market is dominated by on-demand negotiations, and the overall buying and selling atmosphere is tepid.

3. key factors affecting the market

1. Positive factors

raw materials: Uncertainty over geopolitical risks and expectations of a possible Fed rate hike put pressure on the oil market. However, OPEC's possible extension of production cuts and the expected resumption of production by U.S. refineries will help stabilize the oil market. It is expected that the price of crude oil will show a strong trend of shock next month, which will bring benefits to the toluene market.

Supply side: The restart and maintenance plan of the toluene refinery plant coexist, and the future refinery production is expected to be reduced, which will provide support for the price of toluene.

2. The negative factors

downstream market: Although some toluene downstream units have maintenance plans, the overall demand recovery is slow. The recovery of actual demand remains to be seen, which, if not as expected, will dampen the rise in the toluene market.

4. Future Market Forecast

on the whole, although the demand side of toluene has been affected by the maintenance of the plant, the demand has declined, but the volatility of crude oil prices and the reduction of the supply side will bring support to the toluene market. It is expected that in the short term, the mainstream market price of toluene will rise, and the price fluctuation range is expected to be between 7400-7600 yuan/ton.

China's toluene market is in the game between crude oil shock and supply and demand. In the short term, market movements will be affected by both crude oil prices and supply-side changes. For market participants, paying close attention to the dynamics of international oil prices and changes at both ends of supply and demand will be the key to formulating reasonable trading strategies.

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