October 26th news
This week, the toluene market in China showed a mild fluctuation with a slight increase in price, but the upward trend was limited. The supply side provided strong support due to tight spot availability, and refineries were keen on maintaining prices. However, the recovery pace of downstream terminal demand was slow, and there was insufficient acceptance at high prices, leading to a balance between bullish and bearish forces. Market trading activity was sluggish, and industry players adopted a wait-and-see attitude. Spot price differences varied across regions, with Shandong showing relatively firm negotiations, while East China and South China mainly followed the market trend. Overall, there was no concentrated surge or significant decline in prices.
According to the commodity market analysis system, from October 19 to October 26, 2026, the Chinese toluene market showed a narrow fluctuation trend. At the beginning of the week on October 19, the average market price was 8,806.67 CNY/ton, and by the end of the week on October 26, the average market price was 8,863.33 CNY/ton, with a cumulative weekly increase of 0.64%.
Cost Side:
Toluene is produced through crude oil refining, with international crude oil being the core cost driver at this stage. This week, the upstream raw material naphtha market has been fluctuating within a range following international crude oil, with relatively limited volatility, and the overall cost side has maintained a stable and slightly strong trend. The repeated fluctuations in the crude oil market have led to small fluctuations in naphtha prices, providing some support for the bottom line of aromatics production costs at refineries. However, the raw material end lacks the momentum for a sustained and significant increase, making the cost drive weak and not the dominant factor in this round of toluene price increases. The cost mainly plays a role in supporting the bottom of the toluene market, with a weaker upward pull, making it difficult to independently push toluene prices to continue rising; at the same time, the absence of a significant drop in raw materials has also blocked the space for a rapid deep fall in toluene, causing the toluene market to fluctuate and consolidate around the cost line. As of October 23, the settlement price for the December contract of U.S. WTI crude oil futures was $103.92 per barrel, and the settlement price for the December contract of Brent crude oil futures was $116.72 per barrel.
Supply side:
This week, the supply of toluene in China as a whole maintained a tight balance. Some refineries in China continued to operate at low capacity, with no plans for concentrated resumption of production, resulting in limited increases in the available commodity volume. The refineries' shipping pace is controllable, and the listed prices remain firm. Regional inventory levels overall remained low, with slow inventory depletion in East China ports, Shandong storage areas, and South China tanks, and a slow pace of replenishment, making spot resources not very abundant. The US dollar price in the external market fluctuated, and the import arbitrage window was volatile. This week, there was not much increase in arriving cargoes, and external supply was limited. The overall inventory pressure on refineries is not significant, and their shipping mentality is stable, with little willingness to sell at low prices. The supply side continues to support the spot price of toluene, which is also the core factor for the market to maintain a strong and volatile trend this week.
Demand side:
Downstream industries in China as a whole continue to follow the rigid demand procurement model, with a weak enthusiasm for active inventory replenishment. The operating rates of major downstream industries of toluene, such as coatings, inks, solvents, and TDI, remain stable without significant increases. The increase in terminal product orders is limited, and the finished goods shipments from downstream factories are sluggish, leading to squeezed profit margins. Procurement strategies tend to be conservative, with most adhering to a just-in-time approach, and there are fewer instances of large-scale locking of goods or advance stockpiling. As the price of toluene slightly increases, downstream acceptance of high-priced goods decreases, and inquiries have cooled down, with actual transactions mostly consisting of small, essential orders. Middle traders operate more cautiously, focusing on quick in-and-out operations, with little intention to stockpile and limited speculative purchases. The lack of sustained demand-side momentum to drive the market upward has, to some extent, suppressed the upward space for toluene prices, limiting further price increases.
Future Market Forecast:
In the short term, China’s toluene market is likely to remain in a narrow trading range. On the upside, the current tight supply‑demand balance is unlikely to reverse quickly; refineries are reluctant to cut prices, and low inventory levels continue to provide support. Coupled with firm cost‑based floor support from upstream feedstocks, downside pressure remains solid, limiting the scope for sharp declines. On the downside, downstream terminal demand is recovering only sluggishly, with insufficient order momentum, and high‑priced supplies face persistent absorption challenges, making it difficult to sustain buying interest. Going forward, price dynamics will hinge on refinery production adjustments, upstream feedstock volatility, and the pace of downstream plant restarts and restocking. Unless refineries collectively ramp up output and increase supply, keeping spot availability tight while naphtha prices stay stable, toluene prices are expected to consolidate on the stronger side within the current range. Conversely, if downstream demand remains weakly constrained, buying activity stays subdued, or upstream feedstocks weaken, there is a risk of a modest pullback. Overall, the likelihood of a sustained directional trend in the near term is low; prices are forecast to trade within a range. Market attention will focus on refinery shipment policies, regional inventory changes, naphtha price movements, and order trends in downstream sectors such as TDI and the coatings industry.
