Crude Oil Fluctuations Keep Toluene Market Rangebound Despite Firm Demand Outlook

Key Highlights

1. Imported toluene traded at ₹82.5/kg (ex-Mumbai & Kandla), up ₹3/kg week-on-week.
2. Deal levels for bulk parcels ranged between ₹82–86/kg + taxes on credit terms.
3. Paints demand stable, while pharma consumption improving post-festive period.
4. Feedstock prices steady, with FOB Korea toluene at $676/mt and crude near $60/bbl.
5. Outlook cautious, with market expected to stay stable to mildly bearish short term.

Toluene Price Snapshot: Imports and Domestic Benchmarks

• Toluene prices increased by ₹3/kg this week, supported by feedstock cost fluctuations and improved trading activity. Imported toluene prices were reported at ₹82.5/kg ex-Mumbai and ₹82.5/kg ex-Kandla.
• Importers actively offered bulk parcels at ₹86+ per kg ex-JNPT on 60-day credit terms, with deal levels in recent weeks ranging between ₹82–86/kg + taxes.

• Domestic market activity picked up marginally, reflecting cautious replenishment by downstream buyers following earlier inventory drawdowns.

Supply–Demand Trends: Paints Stable, Pharma Steady

• A nearly 2% decline in crude oil prices over the past 10 days has weighed on sentiment across the aromatics segment. Demand from the paints and coatings sector—the largest end-use consumer—remained largely stable, with production gradually normalizing post-festive season.
• Meanwhile, the pharmaceutical sector is expected to provide modest support as API and intermediate manufacturers scale up activity in preparation for seasonal demand in November. 
• Market participants noted that recent volatility in the crude oil complex offered limited directional cues, while toluene supply and demand fundamentals remained balanced. Overall, the market is expected to stay stable but somewhat weak in the short term, with prevailing sentiment described as cautiously bearish.
• India’s total toluene demand stands at approximately 57,000 MT per month. Domestic producers such as RIL and BPCL supply around 9,600 MT, while imports account for nearly 45,000 MT of consumption. 
• As the monsoon season ends, a gradual pickup in demand from inks, paints, coatings, and packaging sectors is anticipated, potentially lending mild support to prices.

Feedstock & Energy Market Update: Crude and Benzene

Benzene FOB Korea futures were last assessed at $646/mt, with the market expected to remain relatively stable, though short-term fluctuations are likely. Investors continue to monitor crude oil movements, downstream plant operations, and demand-side developments for cues.

Feedstock Pricing Snapshot:

• FOB Singapore Naphtha: $62.57/bbl
• FOB Korea Toluene: $676/mt
• FOB Korea Benzene: $646/mt

In the broader energy market, WTI crude oil futures rose 0.73% to $60.00/bbl, supported by supply concerns following new U.S. restrictions on Russian oil purchases. Natural gas futures slipped 0.49% to $4.33/MMBtu, constrained by robust LNG export demand.

India, one of the world’s largest crude importers, continues to diversify its sourcing as sanctions complicate Russian crude purchases. Reliance Industries reportedly offloaded some Middle Eastern cargoes, while Chinese state oil majors have temporarily suspended seaborne Russian crude imports.

Market Outlook: Toluene Market Seen Stable with Mild Downside Bias Ahead

• The toluene market is likely to remain steady with a mild downside bias in the near term. While crude oil volatility continues to influence trader sentiment, stable demand from the paints sector and a gradual recovery in pharmaceuticals may help prevent sharper corrections.
• Market participants are advised to remain cautious with bulk procurements, as price movements may remain sensitive to global energy trends and downstream restocking patterns.