O-Nitro Toluene prices are experiencing a notable rebound in the APAC region, driven by a combination of factors. Increased demand for oil blending, coupled with pre-holiday stockpiling, has played a significant role in boosting the market. Rising benzene prices have also contributed to this upward trend, helping to offset the initial effects of oversupply in the Toluene market. While the excess supply initially suppressed a potential price surge, it has now laid the groundwork for future growth in O-Nitro Toluene prices.

Global fluctuations in raw material prices have become crucial in shaping the market. The recent price trend in O-Nitro Toluene is a direct reflection of supply and demand fundamentals, with fluctuations in international oil prices and shifts in the prices of related products like xylene, benzene, and MTBE driving this rebound. Early in the fourth quarter, supply was reduced due to domestic equipment maintenance. However, the market quickly recovered with the introduction of new equipment from Yulong Petrochemical, resulting in a stable and relatively abundant supply of O-Nitro Toluene in the domestic market. Inventory levels in key ports in East China have also been rising, adding to the overall supply.

Although this ample supply initially suppressed a surge in O-Nitro Toluene prices, it has set the stage for the recovery of demand. As the supply-demand dynamics subtly shifted, a market rebound followed, with FOB Qingdao prices rising by 3.4% in December. This surge in O-Nitro Toluene prices has also been observed in importing nations such as South Korea and Japan.

On the demand side, the oil blending sector has played a key role in the recovery. Since November, local refineries have experienced a substantial increase in gasoline shipping orders, which has significantly boosted the demand for oil blending. As the New Year's Day and Spring Festival holidays approached in December, market participants began stockpiling in anticipation of the holiday season, further stimulating demand for O-Nitro Toluene.

Additionally, the high price of pure benzene has led to increased demand for byproducts, contributing to the overall recovery. As a result, the toluene market has entered a fluctuating upward channel after experiencing volatility earlier in the fourth quarter. The complementary relationship between supply and demand has injected momentum into the market, driving the recent price increase of O-Nitro Toluene.

China, the largest global market for paints and coatings valued at USD 49 billion, is seeing mixed performance. While the decorative segment remains stagnant due to a struggling real estate sector, automotive OEM and marine coatings markets are showing signs of growth. Non-decorative industrial coatings are expected to see modest expansion, driven by government stimulus measures and infrastructure investments. With rising demand, the O-Nitro Toluene market is likely to fluctuate and increase in the coming months, particularly in China, South Korea, and Japan. The outlook for January appears positive, with further price recovery expected in O-Nitro Toluene market.