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Strong crude oil support, toluene prices continue to rise

1. Price trend
The bulk list data shows that the overall price of toluene continued to rise this week. The price of toluene on April 18 was 5641 yuan/ton; this Sunday (April 25) the price was 5671 yuan/ton, an increase of 30 yuan/ton or 0.53% from last week.

2. Analysis and Comment

This week, Sinopec’s toluene price adjustment range is +100/+150 (yuan/ton). Toluene stocks at East China ports continued to rise this week. Crude oil prices fluctuated at a high level this week, and external disk prices rose, supporting the rise in toluene prices. However, the downstream news is weak, restraining the increase. In terms of external disks, as of April 23, South Korea’s imported toluene price was US$715/ton, a month-on-month increase of US$8/ton, or 1.13% compared to April 16, and the price of imported toluene in East China was US$742/ton, month-on-month. On April 16, it rose by US$12/ton during the week, or 1.64%.

In terms of crude oil, crude oil remained range-bound this week. Favorable: Some oil fields in Libya have stopped production and reduced supply. Bad news: India is the world’s third-largest oil importer. The number of people infected with the new crown epidemic in India has skyrocketed. Blockade measures have been implemented in some areas, and the recovery of demand for crude oil has been suppressed. U.S. commercial crude oil inventories unexpectedly increased. From April 16th, this week, Brent fell by US$0.345/barrel, or 0.52%; WTI fell by US$1.05/barrel, or 1.66%.

Downstream: In terms of TDI, Eastern China’s TDI fell weakly this week. Domestically produced goods were executed at 15,766.67 yuan/ton, down 3.47% from last week and up 44.21% from the same period last year. The domestic TDI market is weak, and the downstream terminal inventory is acceptable. Just demand is the main factor. The inquiries on the market are deserted and the market trading atmosphere is light.

In the PX market, the domestic ex-factory price of p-xylene remained stable this week, at 6,400 yuan/ton, a year-on-year increase of 48.84%. The overall operation of para-xylene plants in North China and East China is stable. The on-site operating rate is above 90%. The on-site supply of goods is normal, and the delivery situation is good. The operating rate in Northwest China is about 50%, and that in South China is above 50%. As of April 23, the closing prices in Asia were 830-832 US dollars/ton FOB Korea and 838-840 US dollars/ton CFR China.

Three, market outlook forecast

Toluene analysts of the Chemical Industry Branch of the Business Society believe: Look at the supply cost side, the implementation of OPEC+ production cuts, the total number of oil rigs in the United States, and weekly EIA and API inventory data. Second, look at the demand side, the impact of the global epidemic on crude oil demand, the recovery of the industrial chain, the economic and trade situation in Europe and the United States, and the progress of the fiscal stimulus plan. Third, look at the geopolitical situation in the Middle East and China and the United States, the progress of the new crown vaccine, the dollar index and the linkage of the stock market.

Crude oil is expected to run strongly, supporting the price of toluene; gasoline demand is expected to be active before the holiday, and the price still has room for upside. However, the remaining downstream demand has not changed significantly, and the follow-up is general to limit the toluene increase. On the whole, toluene is expected to run at a high price next week, and pay attention to the news of downstream purchases before May Day. Continue to pay attention to the price trend of crude oil, gasoline blending prices, the spring maintenance dynamics of toluene installations, the late arrival of toluene and the impact of changes in downstream demand on the price of toluene.

Post time: Apr-26-2021