According to SunSirs' commodity market analysis system: In 2025, the average price of xylene in the domestic market was 6,110 RMB/ton at the beginning of the year and 5,510 RMB/ton at the end of the year, representing an annual decrease of 9.82%. The overall trend of the xylene market in 2025 was weak, basically divided into two stages: range-bound fluctuations in the first half of the year, followed by a continuous decline in the second half.
According to the data of xylene from SunSirs, the xylene market in 2025 showed more declines than increases, with upward trends in 5 months and downward trends in 7 months. The highest increase was 9.17% in January, and the highest decrease was 12.21% in April.
Review of the xylene and Toluene Market in 2025
First half of the year: Supply and demand dynamics led to range-bound fluctuations, resulting in a 0.16% increase
Cost side: Volatility in crude oil and naphtha prices was a drag on performance
Crude Oil: In the first half of the year, international crude oil prices followed a "surge and then decline" trend. Brent crude oil surged to $83 per barrel at the beginning of the year due to U.S. sanctions on Russian energy, but fell back to around $73 per barrel in June due to expectations of a global supply surplus. In April, the negative impact of the U.S.-China tariff increases intensified, leading to a 9.2% monthly drop in WTI crude oil prices, directly undermining confidence in the cost side of xylene and becoming the core factor behind the price reaching a nearly five-year low in April.
Naphtha: Domestic naphtha supply remained stable in the first half of the year. According to data from SunSirs, domestic naphtha production totaled 37.8 million tons from January to June, a year-on-year increase of 3.2%, with operating rates in the main production areas of Shandong and Guangdong remaining at 75%-80%. In April, prices fell to a low of 6,550 RMB/ton in line with crude oil prices, but rebounded to 7,100 RMB/ton in May-June, following the recovery in crude oil prices. The fluctuations in raw material costs directly impacted the xylene market, leading to corresponding price volatility.
Supply side: Domestic production capacity release fell short of expectations, leading to initial tightness followed by a loosening of supply
In 2025, the planned increase in xylene production capacity was 4.5633 million tons. However, due to the narrowing price spread of benzene, toluene, and xylene, and the decline in production profits, the commissioning of many new facilities has been delayed. According to data from SunSirs, as of the end of June, only Zhenhai Refining & Chemical's 360,000-ton and Wanhua Group's 30,000-ton facilities had commenced operation. The industry's average operating rate was 68%-72%, and the external sales volume of major refineries under Sinopec and PetroChina remained low, with external sales accounting for less than 30% in May.
Demand side: Demand from PX and fuel blending alternated in driving the market, but overall demand remained weak
PX is the largest consumption sector for xylene (accounting for 62%), with demand showing a "weak first, then strong" trend in the first half of the year. From January to April, the MX-PX price spread narrowed to 300 RMB/ton, resulting in low enthusiasm among PX producers for external procurement; in May, the price spread widened to 800-900 RMB/ton, restoring profitability for short-process production. Companies such as Shenghong Petrochemical increased their monthly external procurement by over 120,000 tons, driving a 40% month-on-month increase in xylene transaction volume, and significantly boosting prices in the spot market.
Blending demand accounts for 28% of the market, but performance was weak in the first half of the year. From January to June, domestic gasoline exports decreased by 12.89% year-on-year, with only March and May showing a temporary rebound due to rising oil prices and easing US-China trade tensions. Coupled with the increased penetration rate of new energy vehicles to 38%, and the blending ratio of xylene decreasing from 15% to 12%, consumption in the blending sector only increased by 1.2% year-on-year in the first half of the year, providing limited support to the market.
Second half of the year: Both supply and demand were weak, leading to a drop to a three-year low
According to the business data analysis system of SunSirs, the domestic xylene market showed a "volatile downward trend with a slight rebound at the end of the year" from July to December 2025, with the overall market level significantly lower than in 2024.
Cost side: Crude oil prices were fluctuating at low levels, and the support from naphtha was weakening
Crude Oil: In the second half of the year, international crude oil prices continued to weaken. From July to September, affected by the weak global economic recovery and the less-than-expected implementation of OPEC+ production cuts, Brent crude oil fell from $66/barrel to a low of $58/barrel in September. Although it rebounded to $72/barrel in October due to geopolitical tensions in the Middle East, expectations of oversupply resurfaced in November and December, causing prices to fall back to around $60/barrel by the end of the year, further weakening cost support for xylene.
Naphtha: Domestic naphtha supply remained stable in the second half of the year. Abundant supply suppressed prices, and the average price of naphtha in the second half of the year fell by 6.9% compared to the first half. In December, it rebounded slightly to 6,600 RMB/ton along with crude oil, but overall, its support for xylene costs was limited.
Supply side: New production capacity was being released, shifting the supply situation from tight to loose.
In the second half of the year, the domestic supply pattern of xylene reversed. Before July, the market continued the tight supply situation of the first half of the year. In August, the second phase of Yulong Petrochemical's plant came into operation (approximately 1.2 million tons/year), coupled with the release of new capacity in Ningbo, Yantai, and other places, the total domestic production capacity exceeded 15 million tons/year, and the industry operating rate increased from 72% to 78%. On the import side, the import window remained open in the third quarter, with monthly import volume increasing by 15% month-on-month, and port inventories in East China rising from 300,000 tons to a high of 420,000 tons. Although some refineries underwent maintenance after October, and the operating rate fell back to 62%, driven by the newly added capacity, the supply in the second half of the year still increased by 8.5% year-on-year, and the market shifted from a tight balance to a surplus.
Demand side: Limited support from PX, weak demand for blending components
In the second half of the year, the MX-PX price spread narrowed from 800 RMB/ton to 500 RMB/ton, leading to a decrease in the willingness of PX companies to purchase from external sources. Although PX factories slightly replenished their inventories in the fourth quarter due to recovering costs, there was no new PX capacity added throughout the year, resulting in only a 3.2% increase in demand for xylene, providing weaker support compared to the first half of the year.
Fuel blending: In the second half of the year, demand decreased by 1.5% year-on-year, influenced by the increased penetration rate of new energy vehicles and the upgrading of gasoline quality (the proportion of xylene blended in will decrease from 12% to 11%). Fuel blending companies mostly replenished their inventory as needed, without concentrated purchasing, further weakening their impact on the market; demand in other areas such as solvents remained stable, but only accounted for 10%, making it difficult to offset the weakness in mainstream demand.
2026 Market Outlook for xylenes
Cost perspective: Oil prices are expected to fluctuate at low levels in 2026, resulting in weak cost support
The ongoing conflicts in Ukraine and the Middle East will continue to exert intermittent direct impacts on oil prices, causing periodic fluctuations, but are unlikely to alter the long-term trend. The supply surplus is expected to persist until the first half of 2026, with the IEA forecasting a global daily surplus of 4.09 million barrels. US shale oil production is projected to increase by 1.2 million barrels per day, driving this surplus. Although OPEC+ plans to suspend production increases in the first quarter of 2026, internal disagreements and insufficient spare capacity will limit the effectiveness of their adjustments, making a further decline in the price center highly probable. Influenced by the interplay of supply and demand, geopolitical conflicts, and OPEC+ policy adjustments, SunSirs predicts that the crude oil market in 2026 will generally exhibit a "low-level volatile" trend.
Raw materials aspect: Naphtha production is growing steadily, and raw material supply is sufficient
Naphtha is the main raw material for toluene production, and its production and market conditions directly affect the development of the toluene industry. With the continuous improvement of China's refining capacity and the sustained release of downstream market demand for naphtha, China's naphtha production has continued to grow steadily. Data shows that from January to November 2025, China's naphtha production was approximately 73.955 million tons. Currently, the main naphtha producing regions in China are Shandong, Guangdong, Liaoning, and Zhejiang provinces, with Shandong province having the most prominent production, accounting for approximately 35%. The steady growth in naphtha production provides important raw material support for the development of the toluene industry.
Domestic naphtha production is expected to increase slightly in 2026, with an estimated year-on-year increase of approximately 0.6% to 1%, which will provide a solid foundation for toluene supply. Abundant raw materials and the gradual commissioning of refining and chemical projects will lead to steady growth in basic toluene production. In terms of costs, the production cost of toluene follows the trends of the naphtha and crude oil markets. Additionally, the commissioning of new PX production capacity in 2026 will continue to drive demand for toluene disproportionation, partially offsetting fluctuations in blending demand and providing support for toluene prices.
Supply side: Expected to increase
In 2026, the pace of domestic xylene capacity expansion will accelerate. Leading companies such as Hengli Petrochemical, Shenghong Refining & Chemical, and Huajin Aramco will see their integrated refining and petrochemical facilities, including aromatics units, come online in the second half of 2026. These facilities are primarily located in the Bohai Rim and East China regions, which together will contribute over 70% of the new capacity. According to statistics, by the end of 2025, the total domestic xylene capacity had reached 15 million tons per year, and in 2026, the capacity will exceed 16.6 million tons per year, representing a year-on-year increase of 10%.
Demand side: Stable with a slight upward trend
In 2026, the domestic demand for xylene will present a pattern of "steady growth in core areas, pressure in traditional areas, and compensation from emerging areas." Overall demand growth will be moderately higher than in 2025, with PX industry expansion and the development of new applications being the core driving forces, while demand in the fuel blending and traditional solvent sectors will remain weak.
PX sector: PX demand is expected to grow steadily in 2026. According to data from SunSirs, domestic PX production capacity is projected to increase by 3.6 million tons in 2026, with most of the new capacity coming online in the second half of the year. This represents a 6% year-on-year increase in capacity, corresponding to a demand for xylene of 8.8 million tons, a 7.6% increase compared to the previous year.
Fuel Blending Sector: Fuel blending demand will continue to face multiple pressures in 2026. With the penetration rate of new energy vehicles expected to rise to 45%, the growth rate of domestic gasoline consumption will slow to 1.5%, and the proportion of xylene blended into gasoline may further decrease to 11%. Coupled with the continued weakness in the gasoline export market, fuel blending companies are largely maintaining a "replenish inventory as needed" strategy, lacking the motivation for centralized procurement. Therefore, the year-on-year growth rate of xylene demand in the fuel blending sector is expected to be less than 1%, providing limited support to the market.
Solvents and Other Fields: The overall solvent market is expected to remain stable in 2026, but with structural differentiation. Due to stricter VOCs emission controls, the demand growth for conventional xylene in traditional coatings and pesticides will continue to slow down. However, high-purity xylene (purity above 99.8%), due to its environmental advantages, will see its application share in high-end coatings and environmentally friendly solvents increase to 20%, with a price premium of 15%-20% compared to conventional products. In addition, demand from emerging fields such as new energy battery solvents and pharmaceutical intermediates is growing rapidly, with an expected average annual growth rate of 7%, becoming an important supplement to the demand in the solvent market.
Market Outlook:
In the short term: On the supply side, newly added domestic production capacity has not yet been fully released, and the industry's operating rate remains at 75%-80%, with low inventory levels at East China ports providing price support. Regarding imports, the arbitrage window between Asia and the Americas has opened periodically, potentially leading to a slight increase in import volumes, but this is unlikely to significantly alter the tight supply-demand balance. On the demand side, PX companies are maintaining steady external procurement supported by the futures market, while blending demand is suppressed by the increasing penetration rate of new energy vehicles, resulting in only basic demand support. Overall, naphtha prices are expected to remain stable, with limited cost support. Coupled with strong market wait-and-see sentiment, a unilateral price trend is unlikely in the short term. The spot market is expected to fluctuate within a range of 5,500-5,700 RMB/ton.
In the long term, in the second half of 2026, new production capacity from companies such as Hengli and Shenghong will come online, but stricter environmental policies will drive some small and medium-sized producers out of the market, offsetting the supply pressure. On the demand side, the release of new PX production capacity will drive a 7.6% year-on-year increase in xylene demand, becoming the core driving force; the application of high-purity xylene in the high-end solvent field is increasing, with emerging demand compensating for weakness in traditional sectors. Overall, with a mix of positive and negative factors affecting supply and demand, the xylene market is expected to remain volatile within a range in 2026. Key factors to watch include the progress of PX production, crude oil price trends, and the enforcement of environmental policies.
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