Crude Oil and Supply-Demand Dynamics Drive Toluene Market to First Decline and Then Rise in April

April 30 News

According to the commodity market analysis system data, on April 1st, the price of toluene in China was 8,101 CNY per ton, and by April 30th, it had dropped to 6,934.33 CNY per ton, with a cumulative price decrease of 14.4% during the period.

In April 2026, the Chinese toluene market showed a trend of first falling and then rising, with a significant overall decline. The market was volatile and weak. In the early part of the month, the market continued to show a weak downward trend, with prices continuously weakening. By mid-month, the decline intensified, and prices fell to the lowest point of the month. In the latter part of the month, the market stabilized and saw a slight rebound, but the rebound was limited and did not recover the previous price decrease. Throughout the month, transactions were mainly small orders driven by essential demand, and the overall trading atmosphere was lukewarm. Traders and downstream operators had a strong wait-and-see attitude, leading to overall pressure on the market.

Cost aspect:

In April, international crude oil prices initially declined and then rebounded, with the overall price center of gravity shifting downward, continuously weakening the cost support for toluene. At the beginning of the month, geopolitical tensions in the Middle East repeatedly flared up, causing crude oil futures prices to oscillate at high levels before plunging sharply. Although prices briefly rebounded in the mid-to-late part of the month, this rebound failed to translate into sustained positive momentum. By the end of April, WTI and Brent crude oil futures prices had noticeably fallen from their levels at the start of the month, directly undermining the cost support for toluene production. Meanwhile, the price spread between pure benzene and toluene remained loose, and although arbitrage opportunities between PX and mixed xylene did emerge, their boosting effect on toluene was limited and insufficient to offset the negative impact of weaker crude oil prices. As a result, the cost side as a whole showed a pattern of high-level retreat with weak support.

Supply side:

In April, the Chinese toluene market supply remained generally loose, with major refineries and local refineries in Shandong showing high enthusiasm for shipping, resulting in ample market supply. The toluene units of major refineries such as Sinopec and CNPC operated stably, and the capacity release from local refineries in Shandong was sufficient, ensuring smooth circulation of regional supplies. In terms of imports, although the import volume of toluene in April decreased slightly month-on-month, the port inventory remained at a reasonably high level. The supply pressure at Jiangsu ports was moderate, and there was an ample supply of spot market goods. As the May Day holiday approached, some refineries advanced their shipments, further increasing the market supply. Combined with limited export arbitrage opportunities, the supply-side pressure in China continued to suppress the upward price trend.

Demand side:

According to the commodity market analysis system, from April 1 to April 30, the price of PX in China showed a steady upward trend. As of April 30, the execution prices in the four major regions—East China, North China, Central China, and South China—were 9,900 CNY/ton, up from 9,700 CNY/ton on April 1. The main facilities at Yangzi Petrochemical and Zhenhai Petrochemical operated stably, and the sales of the products were normal.

International market: From April 1 to 30, the price of paraxylene (PX) in the Asian market fluctuated and rose. As of April 29, the closing price of PX in the Asian market was $1,266-1,268 per ton CFR China, an increase of $52 per ton from April 1, with a relatively significant overall fluctuation.

In April, the overall weak demand and low purchasing willingness in the downstream industries of toluene were one of the core factors dragging down the price. The operating rates in the downstream industries such as styrene, phenol, and caprolactam showed a divergence, generally maintaining at a medium to low level, leading to limited rigid demand procurement for toluene. The operating rate of the styrene industry saw a slight month-on-month decline, with enterprises making purchases based on their needs under cost pressure, showing low enthusiasm for replenishment; although the operating rates in the phenol and aniline industries remained relatively stable, the lack of terminal orders led to weak procurement at the raw material end. Additionally, approaching the May Day long holiday, the restocking by downstream enterprises was basically completed, with a lack of willingness to take over high-priced goods, and a strong wait-and-see attitude, resulting in market transactions mainly consisting of small-scale essential orders, lacking support from large-scale deals.

Future Market Forecast:

Overall, the Chinese toluene market in May is likely to experience narrow fluctuations, with a pattern of initial stability followed by a wait-and-see approach. On the positive side, expectations of stabilizing and rebounding crude oil prices will provide temporary support to costs, and downstream demand may pick up after the May Day holiday, boosting inquiry activity as buyers look to replenish inventories. On the negative side, supply remains ample, inventory pressures persist, downstream demand continues to recover slowly, and high-priced supplies face insufficient acceptance. Additionally, geopolitical tensions in the Middle East, along with volatility in crude oil and related futures, are influencing market sentiment. It is expected that prices will consolidate narrowly in early May; going forward, close attention should be paid to trends in crude oil prices, developments in the Middle East, downstream plant restarts and inventory replenishment activities, and changes in refinery inventories.