Shanghai (ChemAnalyst) – Toluene prices showcased an upward trend in the Chinese market for the past two days. Rising raw material values, stable production, and healthy trading are the primary factors involved in the Toluene price hike. Additionally, the importing freight charges and the demand for the product from the domestic market have also influenced the Toluene prices in China.

The restriction outside China continued to ease, which rebounded the activities after a cluster of public holidays. The demand for gasoline in China increased while feedstock benzene and xylene prices also rose, resulting in the Toluene price hike. Besides this, the resumption in the operating rates after the lockdown relaxation showed a healthy production activity. Thus, the daily output was stable, and the supplies gained strength.

Moreover, one of the domestic traders stated that "The overall production of Luoyang Petrochemical was stable after resuming their operations." Therefore, increased demand for Toluene in the production of downstream paints, plastics, adhesives, and rubber positively impacted the Toluene market. Thus, the prices of Toluene witnessed a rise of 2.5%, with an increase of $28 per tonne from 15th May to 17th May.

China is one of the major importers of Toluene from South Korea; however, the trading activity across the region strengthened after a respite in the port congestion the freight charges started soaring. For China, the import-related container freight charges rose to around 44.9%, which resulted in the Toluene market following an uptrend. Since the traders were forced to revise their offers during the lockdown, the current upsurge in the freight charges has prompted them to raise the price to protect their profit margin.

According to ChemAnalyst, "Toluene prices might continue to rise in the forthcoming weeks as the freight charges are not expected to drop anywhere sooner. Moreover, the demand from the domestic market is likely to rise with stable to firm buying activities. Also, the low availability of raw materials could increase their values, further inflicting the Toluene prices."