Supply and Demand Under Pressure: Toluene Market Shakes and Declines in May

May 28 news

In May 2026, the Chinese toluene market showed an overall fluctuating downward trend. The prices first declined and then rose, but fell again at the end of the month, with the market focus continuously shifting downward. According to the commodity market analysis system data, on May 1st, the price of toluene in China was 6934.33 CNY/ton, and by May 28th, it had dropped to 6594.33 CNY/ton, a cumulative decrease of 4.9% over the period.

Cost Side:

In May, the cost support for toluene as a whole was weak. International crude oil prices fluctuated and weakened, with frequent fluctuations during the month, showing an overall trend of first falling, then rising, and finally falling again. Naphtha prices followed the same pattern of fluctuation, providing insufficient bottom support for toluene. As a byproduct of integrated refining, the price of toluene is closely linked to crude oil and naphtha. This month, the geopolitical premium on crude oil dissipated, putting overall pressure on the cost of refining raw materials, and refineries lacked the motivation to transmit production costs to the toluene market. Although there were some short-term rebounds during the month, they were brief and limited in strength, making it difficult to form stable support. The overall cost end continued to weaken in its role of supporting toluene prices, driving the toluene market quotes to fluctuate and decline.

Supply side:

In May, the overall supply of toluene in China remained loose. The main refineries and local refineries in Shandong operated stably, with their operating rates maintained at a medium to high level, and there was an ample supply of goods for external sales. Only a few units underwent short-term maintenance during the month, and the scale and impact of the maintenance were limited, not significantly reducing the overall supply. At the same time, the port inventory in East China remained relatively high, and imported goods arrived as scheduled, further supplementing the Chinese market. The pace of shipments within the market was steady. To promote transactions, both producers and traders offered flexible and slightly lower prices. The market had an abundant supply of goods, and the supply pressure continued to exist, suppressing the toluene market.

Demand Side:

According to the commodity market analysis system, from May 1 to May 28, the PX market prices in China remained stable. As of May 28, the execution prices in the four major regions of East China, North China, Central China, and South China were 9,900 CNY/ton, unchanged from May 1. The main facilities at Yangzi Petrochemical and Zhenhai Petrochemical operated stably, and the product sales situation was normal.

International Market: In May, the price of paraxylene (PX) in the Asian region experienced volatile downward trends. As of May 26, the closing prices for PX in the Asian market were $1,068–$1,070 per ton FOB South Korea and $1,089–$1,091 per ton CFR China—down $198 per ton from the prices on April 29.

In May, the overall downstream demand for toluene in China was weak, with insufficient support from rigid demand. The operating rates of downstream industries such as oil blending, disproportionation, coating solvents, and TDI remained at medium to low levels, showing a lack of production enthusiasm. The terminal market demand was flat, with fewer orders in industries like coatings, rubber, and ink. The finished product sales were sluggish, leading to inventory buildup, which made downstream manufacturers cautious in their procurement. The market mainly followed a rigid demand procurement approach, with low willingness for centralized restocking, and there was a strong demand for price reductions on toluene raw materials. Although there was a slight marginal improvement in the rigid demand for disproportionation units and relatively stable export orders within the month, the overall demand still failed to provide effective support, unable to sustain price increases.

Future Market Forecast:

From a comprehensive fundamental perspective, the Chinese toluene market is likely to continue its volatile and generally weak trend in the short term. On the cost side, fluctuations in international crude oil prices have created unstable support, making it difficult to sustain upward momentum. The supply side remains relatively loose in the short term, with port inventories and refinery shipments continuing to face downward pressure. Downstream demand is recovering slowly, and rigid demand remains weak without any significant improvement, leaving market participants lacking confidence in bullish bets and limiting the room for price increases. However, as more refinery maintenance plans are scheduled in the later period, supply is expected to tighten marginally. Moreover, if international crude oil prices stabilize and rebound, cost-side support will gradually strengthen. Coupled with the approaching peak season for traditional downstream demand, end-user purchasing intentions may slowly pick up, potentially helping the toluene market gradually halt its decline and stabilize. In the medium term, as supply-demand dynamics improve, the market could see a volatile but stabilizing recovery. Going forward, it will be crucial to closely monitor key factors such as trends in international crude oil prices, refinery maintenance schedules, changes in port inventories in East China, and the pace of downstream plant start-ups and restocking activities.