According to the Commodity Market Analysis System of Shengyi Society, the overall toluene market has been declining recently (7.26-8.5). On July 26th, the benchmark price of toluene was 7510 yuan/ton, and on August 5th, the benchmark price of toluene was 7300 yuan/ton, a decrease of 2.8% during the period. During this period, the toluene market operated weakly, with market prices fluctuating downwards. The decline in crude oil prices during the week has dragged down market sentiment, and the overall market atmosphere is bearish. On the supply side, with the increase of port cargo, the supply is relatively loose, which affects the bearish market atmosphere. The overall demand is weak, but with the downward trend in prices, there is some downstream demand to replenish inventory at low prices. As of August 5th, the mainstream price range in East China is between 7300-7350 yuan/ton, a cumulative decrease of 50-100 yuan/ton compared to last week.
Cost aspect: Due to the escalating geopolitical tensions, investors are concerned about the escalation of the Middle East conflict; The significant decrease in US crude oil inventories has provided support for oil prices. As of August 1st, the settlement price of the main contract for WTI crude oil futures in the United States was $76.31 per barrel. The settlement price of the main Brent crude oil futures contract is $79.52 per barrel. The crude oil analyst of Shengyi Society believes that in the short term, the situation facing crude oil is very complex, and crude oil may intensify its volatility. At present, it is necessary to pay attention to further developments in the Middle East situation, as the tense situation may continue to push up the risk premium of crude oil. At the same time, the expectation of the Federal Reserve cutting interest rates has also brought certain benefits to demand, and oil prices may continue to seek upward space. In the medium to long term, the supply uncertainty in the oil market is increasing, especially with the upcoming US presidential election. If the Republican Party wins, it may have a more profound impact on the oil market, and US crude oil production may be subject to policy increases. The future game of crude oil supply and demand may seek a rebalancing.
Supply side: Sinopec’s toluene quotations have generally decreased this week, but there are slight differences in the degree of adjustment among different underground sources. The company is operating normally, with stable equipment production and many products for personal use, resulting in stable production and sales. Among them, the East China Company quoted 7200 yuan/ton, the North China Company quoted 7350 yuan/ton, the South China Company quoted 7300-7350 yuan/ton, and the Central China Company quoted 7200 yuan/ton.
Demand side: The external market for xylene continues to decline, and the rigid demand support for toluene is relatively weak
On August 5th, Sinopec Sales Company temporarily stabilized the price of xylene, with the current execution price being 8500 yuan/ton. This price is implemented in East China, North China, Central China, and South China. Yangzi Petrochemical, Zhenhai Petrochemical and other units are operating stably and selling normally. As of August 2nd, CFR China’s closing price was 1005.33 US dollars/ton, a decrease of 3.34 US dollars/ton from last week.
On Friday (August 2nd), the Asian toluene market closed with mixed gains and losses, with the FOB South Korean closing price of $886-888/ton in August rising by $6/ton; The closing price of CFR China in August is 884-886 US dollars per ton, a decrease of 6 US dollars per ton.
Market forecast: The recent trend of crude oil on the cost side is weak, and the support on the cost side is weak. In terms of supply, the port cargo has slightly increased recently, and the supply is relatively loose. On the demand side, with the decline in market prices, some downstream enterprises have certain purchasing needs, and market trading is more active than before, which still provides some support for market sentiment. Overall, the toluene market is mixed with negative and positive factors, and it is expected that the market will mainly experience narrow fluctuations in the short term, with a focus on the operation of key downstream facilities in the future.
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