September 20th report:
Since September 2026, China’s toluene market has followed a pattern of initial gains followed by declines, ultimately closing higher. Price fluctuations have been alternately driven by crude oil trends and supply‑demand expectations. In the first half of the month, stronger international crude prices pushed aromatics costs upward, while tighter domestic supply further supported price increases. In the middle and latter part of the month, as expectations of tight crude supplies eased and downstream purchasing remained sluggish, prices surged higher before retreating; however, earlier price hikes persisted, leaving the overall range still trending upward.
According to the commodity market analysis system, since September 2026, the Chinese toluene market has first risen and then fallen, with an overall upward trend. The average market price on September 1st was 7,440 CNY per ton, and on September 20th, it was 8,166.67 CNY per ton, resulting in a cumulative price increase of 9.77% for the month.
Cost aspect:
Toluene is produced through crude oil refining, and international crude oil is the core cost driver at this stage. In the early part of the month, market concerns over tightening crude oil supply led to a continuous rise in oil prices, providing ample cost support for toluene and driving up its price. In the middle and late parts of the month, the market anticipated that Saudi Arabian crude oil supply would gradually recover, weakening the upward logic of crude oil, and crude oil futures fluctuated and weakened. The loosening of cost support directly dragged down toluene futures and spot prices, with the change in cost expectations being the key factor behind the weaker performance in the middle and late parts of the month. As of September 18, the settlement price for the November contract of U.S. WTI crude oil futures was $96.08 per barrel, and the settlement price for the November contract of Brent crude oil futures was $103.87 per barrel.
Supply side:
In the first half of September, some refineries in China underwent plant maintenance, leading to a tightening of toluene supply and low inventory levels. Petrochemical companies were keen on maintaining high prices, which supported price increases. By mid to late September, as maintenance was completed and plants resumed operations, coupled with the arrival of imported cargoes, the tight supply situation gradually eased. The expectation of increased supply put pressure on the market's upward trend. Petrochemical companies subsequently lowered their ex-factory quotes, and more goods were sold in the circulation market, further exacerbating the price decline.
Demand side:
Downstream paint, solvent, and chemical‑related facilities have maintained steady operations, but there has been no significant increase in new procurement; the market remains driven primarily by restocking to meet immediate needs. During the first half of the month, as prices were rising, downstream buyers mostly purchased on a need‑based basis, with relatively subdued wait‑and‑see sentiment. In the latter half, as prices reversed and began to decline, downstream players adopted a “buy on rallies, not on drops” mindset, largely holding off on replenishing inventories. Trading activity weakened, buying interest remained persistently weak, and with no solid demand‑side support, the downward pressure on toluene prices intensified.
Future Market Forecast:
The expectation of a short-term oversupply in crude oil continues, leaving room for downward pressure on oil prices, with weak cost support; the supply of toluene in China is continuously recovering, further easing the tight supply situation, but there is no expectation of a recovery in downstream demand, leading to multiple bearish factors resonating. It is expected that the toluene market will maintain a weak and volatile trend in the short term, with the core trend of the market closely following international crude oil price fluctuations and the pace of refinery shipment adjustments.
