Downstream consumer sentiments influenced by European inflation and COVID-19 cases have impacted the market fundamentals of several feedstocks, including Toluene. The declining price trend of Toluene has been attributed to the reduction in offtakes from the terminal sector coupled with tumbling upstream crude oil prices. As per the latest insight, this year's annual crude oil production from China's Tarim oilfield reached a new high of 6.6 million tonnes. Moreover, following a bilateral meeting last week, the energy officials of Saudi Arabia and Iraq reiterated their support for the crude oil production cut agreed upon in October 2022.

Furthermore, the major strike by truckers in South Korea has threatened to interrupt manufacturing and fuel supplies for industries from automotive to petrochemicals. South Korea is an export-driven economy and holds a significant share of Toluene in the international market. The market players have reported a decrement in imports from the Asian and European markets, leading to relatively high levels of inventories among the domestic manufacturers. The inquiries from the domestic paints and coatings industries have also remained on the lower end amid weak buying sentiments from the terminal consumer.

On the other hand, in the Netherlands, the Toluene prices have significantly declined. The upstream Brent crude oil price has fluctuated, putting pressure on Toluene manufacturers' market sentiments. Furthermore, the procurement from the downstream Benzene market was sluggish and did not offer much support to the price realizations of Toluene. The spot supply of Toluene was abundant, and the traders had been providing the goods at slashed prices. As per the ChemAnalyst database, the Toluene prices were settled at USD 1105 per tonne on the week ending November 25th, 2022.

As per ChemAnalyst, the demand dynamics of Toluene are likely to witness a downtrend across the globe as downstream market players retain ample product inventories. In addition, any fluctuation in upstream crude oil will be reflected in the manufacturing costs of Toluene and impact the quotations for the downstream solvent industries in the forthcoming weeks.