In July 2026, the domestic toluene market exhibited a trend of rising initially and then falling, while maintaining an overall upward trajectory. Data from the SunSirs commodity market analysis system shows that the domestic toluene price stood at 5,741 RMB/ton on July 1 and 6,600 RMB/ton on July 30, marking a cumulative increase of 14.96% over the period. Driven by factors such as cost-side support and shifts in supply-demand dynamics, the market's price level rose significantly; although there was a slight pullback toward the end of the month, the overall gain remained substantial, with trading activity fluctuating in tandem with price movements.

Cost Perspective:

In July, cost-side support played a prominent role in the toluene market, serving as a key driver for price increases. Crude oil, the primary upstream feedstock for toluene, exhibited a trend of volatile yet firm pricing throughout the month; factors such as tightening supply-demand dynamics in the international market and geopolitical tensions boosted oil prices, thereby driving up the cost of toluene production inputs. Data monitored by SunSirs indicates that rising feedstock prices directly increased production costs for toluene manufacturers. With producers showing a strong determination to maintain price levels, a solid cost-based foundation was established for market gains. This robust cost support persisted through the first half of July, acting as a critical catalyst for the significant surge in toluene prices. As of July 29, the settlement price for the September contract of US WTI crude oil futures stood at $84.46 per barrel, while the settlement price for the October contract of Brent crude oil futures was $88.09 per barrel.

Supply Side:

Domestic toluene supply remained generally tight in July, providing strong support for prices. Operating rates at domestic production facilities stayed at low-to-moderate levels throughout the month; maintenance work and load adjustments at certain refineries reduced the volume of spot toluene available in the market. Meanwhile, port inventories remained low and circulating supplies were limited, sustaining the tight spot market situation. This supply-side constraint resulted in insufficient market liquidity and a marked reluctance among sellers to part with stock, further driving up toluene prices and serving as a key factor behind the market's upward trend in July.

Demand Side:

According to the SunSirs commodity market analysis system, as of July 30, Sinopec had raised its execution price for PX to 8,500 RMB/ton—an increase of 600 RMB/ton from the 7,900 RMB/ton recorded on June 30. This price is currently being implemented uniformly across East, North, Central, and South China, with production units at facilities such as Yangzi Petrochemical and Zhenhai Petrochemical operating stably and sales proceeding normally. The continued rebound of offshore PX prices from lows has provided cost support, driving up domestic ex-factory quotes. However, demand recovery in the downstream PTA and polyester markets remains limited; enterprises show little inclination to chase rising prices, and end-user procurement remains cautious, making it difficult for the demand side to provide a strong upward impetus.

International Market: Asian paraxylene (PX) prices rebounded from lows in July. While the market initially extended the weak trend seen in June, prices recovered by month-end to $1,045-1,047/tonne (FOB Korea) and $1,066-1,068/tonne (CFR China). A recovery in crude oil prices during the month provided cost support, driving a gradual price rebound of over $86/tonne from end-of-June levels. However, due to sluggish downstream demand, the rebound was limited, and market trends remained heavily dependent on fluctuations in crude oil prices..

In July, the demand side of the toluene market showed mixed performance, with steady transaction activity driven by essential demand. As a key chemical raw material, toluene saw consistent procurement from downstream sectors such as coatings, rubber, and pharmaceuticals. Although some downstream enterprises entered the traditional off-season toward the end of the month—leading to a slight dip in purchasing enthusiasm and a shift toward buying strictly on an as-needed basis—trading volume had previously increased during the first two-thirds of the month; stable operating rates and the release of concentrated restocking demand in those periods drove up market activity. Overall, the solid essential demand from downstream sectors provided a floor for market prices, helping to maintain toluene prices at a high level throughout July.

Market Outlook

In August, the domestic toluene market will continue to be driven by a combination of cost factors and supply-demand dynamics. Regarding supply, spot availability may see a slight increase, potentially easing the current tightness; on the demand side, the off-season nature of downstream industries is likely to become more pronounced, with purchasing demand remaining sluggish. Overall, the market is expected to experience high-level volatility and narrow fluctuations, with prices hovering within the current range; key factors to monitor include crude oil price trends, refinery operating rates, and the pace of downstream demand recovery.

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