Toluene prices have been falling sharply in the Chinese market for the past few weeks. Feedstock prices fell due to the drop in crude oil prices to US$95~100 per barrel. Additionally, Toluene prices are facing the most difficult challenge due to deteriorating market demand and a weaker economic outlook. Besides this, the continuous trade deficit is also impacting the Toluene value.

As per the latest insight, the growth of construction and other downstream sectors has been obstructed by geopolitical tensions caused by the Russia-Ukraine war and the resurgence of COVID, which led to low product prices. At the same time, the imports price have reduced in China due to regional price falls, and traders have also started offering discounts on spot purchases. Hence, as of the result, Toluene Ex- Shanghai prices were quoted at USD 1185/Tonne with a week-on-week declination of around 4.0% in the week ending 29th July.

 Also, China's manufacturing activity shrank after bouncing back from Covid-19 lockdowns the month before, as fresh virus flare-ups and PMI fell to the lowest level compared with the previous month. In addition, low start-up and production costs have slumped the region's Toluene market sentiments. On the raw material front, Benzene and Xylene prices have plummeted as a result, and the market value of Toluene has been decreasing. Moreover, insufficient firm transportation has the other facets of the price plunge in the domestic market. Similarly, in the South Korean market, prices of Toluene have dropped by 3.7% in the preceding weeks due to limited inquiries from the domestic and international markets.

According to ChemAnalyst estimation," the prices of Toluene will continue to follow a downtrend in the upcoming weeks if low crude prices will sustain for a protracted period. Meanwhile, demand from the downstream solvent, paint, and coating industries might substantially influence the value chain of Toluene across the Chinese market."