Market observes low price trend for toluene due to the subdued demand

The year begins with a sluggish toluene price trend in the European market. The high demand and supply chain constraints marked a downturn in the prices of toluene in the European market.

Toluene prices in the European market have declined since the beginning of the year 2024. The trends are influenced by several factors, including the production costs and demand projections obtained from the end-use manufacturing units in the European market. The increase in demand, along with other factors such as a fluctuating supply chain rate, resulted in a sluggish market for toluene.

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Moreover, a decrease in the rates of benzene in the US market had impacted the prices of toluene in the global market. However, the market remained stable for naphtha and crude oil during the first week of January 2024. This stability in the market prompted the retailers to reduce the prices for toluene and its other derivatives.

Last year, Aramco, a leading producer of energy and chemicals based in Saudi Arabia, lowered oil prices during the month of February. The price drop was very significant compared to the last 13 months. Although the rates of Saudi crude oil were relatively higher compared to other domestic options, the North Asian refineries were satisfied with the lower prices.

A recent analysis conducted by Bloomberg survey of refiners predicts that Aramco is likely to lower the prices of its crude oil due to high competition in the Asian Market along with the availability of cheaper crude oil from other regions, including Guyana, Europe, and the USA.

The ongoing low demand from the downstream industries, including solvent, adhesives, and coating industries, are also contributing to the overall rates of toluene. The geopolitical conflicts and issues in the major trade routes have impacted the overall price dynamics of toluene in the global market.

The market is facing instability as retailers and buyers are gradually restricting themselves from placing higher orders. Additionally, the contraction and restrictions in the eurozone manufacturing sectors are expected to impact the selling prices of toluene in the domestic European market. The ongoing market status is causing limited processing activities by the significant toluene producers, which in turn is causing a decrease in the operating rates, ultimately leading to inefficiency and financial challenges.

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According to Procurement Resource, the European market is currently facing low-price trends for toluene in the domestic regions. The curbed demand, along with the stable rates of naphtha and crude oil during the first week of January, has prompted the decline in the costs of toluene in the European market. The market is expected to remain fluctuating amid the continuous rise in naphtha prices during the upcoming months.