According to the Commodity Market Analysis System of Shengyi Society, the toluene market saw a slight increase from December 30 to January 6, 2024. On December 30th, the benchmark price of toluene was 6050 yuan/ton, and on January 6th, the benchmark price of toluene was 6080 yuan/ton, an increase of 0.5%. This week, the overall trend of the toluene market remained stable with a slight increase, while the overall trend of crude oil remained stable with a slight increase, driving an improvement in the atmosphere of the spot market. The purchasing enthusiasm of diversified enterprises in Shandong region is still relatively good, and the overall demand for oil blending is weak. At present, the overall supply is stable but slightly tight, and the ex factory prices of refineries in Shandong have slightly increased. The atmosphere in the spot market is good.

On the cost side: During this cycle, crude oil prices have slightly increased. On the one hand, the OPEC+production reduction agreement has been extended until the end of the first quarter, and some oil producing countries are still implementing compensatory production cuts. This has provided favorable support for crude oil supply, leading to an increase in crude oil market prices. On the other hand, the instability of the situation in the Middle East still exists, which is good news for the international oil market. Overall, the rate of change in crude oil during the cycle remains positive. As of January 3rd, international crude oil futures rose and the settlement price of the main contract of WTI crude oil futures in the United States was $73.96 per barrel. The settlement price of the main Brent crude oil futures contract is $76.51 per barrel.

Supply side: Sinopec’s toluene quotation is stable, and the company is currently operating normally. The production of the equipment is stable, and the products are mostly for personal use, with stable production and sales. As of January 6th, East China Company quoted 6000 yuan/ton, North China Company quoted 6050 yuan/ton, South China Company quoted 6100-6150 yuan/ton, and Central China Company quoted 6150 yuan/ton.

On the demand side, the external market for xylene has slightly rebounded, and demand support is still acceptable

On January 6th, the price of xylene at Sinopec Sales Company was temporarily stable, with a current execution price of 7100 yuan/ton. This price was implemented in East China, North China, Central China, and South China. Yangzi Petrochemical, Zhenhai Petrochemical and other facilities operated stably, with normal sales, and remained the same as the price on December 30th. The PX price continued to decline both inside and outside the cycle. As of January 3rd, the closing prices of the Asian xylene market were 819-821 US dollars/ton FOB Korea and 844-846 US dollars/ton CFR China, an increase of 24 US dollars/ton compared to December 30th.

Market forecast: The recent stable to strong trend of crude oil will provide a certain boost to the toluene market. The demand side has shown decent performance recently, with Shandong performing well and other regions showing overall stability. Recently, the inventory of ports in East China has slightly increased on the supply side. It is expected that the toluene market will operate steadily, moderately, and strongly in the short term under the boost of demand.