Indian Toluene Market Sees Price Correction on Weak Crude, Tepid Demand

Toluene Price

• Toluene prices in the domestic Indian market saw a downward revision of ₹1/kg, as importers adjusted rates amid falling crude benchmarks and sluggish downstream demand.
• Bulk deals from importers were quoted at ₹64.50++ per kg (ex-Kandla) and ₹65.50++ per kg (ex-Mumbai) for 60-day payment terms. Meanwhile, trader offers were reported at ₹66++ per kg (ex-Mumbai) and ₹65.75++ per kg (ex-Kandla) under similar credit terms.
• The softening of prices is attributed to corrections in upstream crude oil benchmarks—particularly WTI—and a muted outlook from key downstream industries.
• In the international market, FOB Korea benzene futures also reflected weakness:
  A. 2H May 2025: $709/MT (down $6)
  B. 1H June 2025: $708/MT (down $6)

Supply and Demand

• Toluene supply remained stable across Indian ports, supported by consistent vessel arrivals. However, trade activity was notably subdued.
• The pharmaceutical sector, one of the key downstream consumers, showed some buying interest this week. However, overall demand from bulk buyers remained weak. A trader cited crude price corrections and bearish sentiment in Asian benchmark FOB Korea Toluene prices as the primary reasons behind buyers' reluctance to stock up.
• Most end-users continue to maintain a cautious approach, anticipating further price corrections and operating on lower replacement cost expectations.
• Other downstream segments such as packaging, paints, coatings, and inks exhibited moderate demand.
• From a BTX margin perspective:
  1. The naphtha-to-toluene spread narrowed significantly to $108/MT, falling below the breakeven threshold of $150/MT.
  2. The toluene-to-benzene spread turned negative at -$40/MT, versus a required margin of $90/MT for breakeven.
• These margin pressures underline the need for a price recovery in toluene to ensure sustainability of refinery operations.
• “A rebound in toluene prices is critical for refinery profitability,” said a leading indentor. With downstream demand expected to gradually recover and upstream crude showing signs of firming, price support may emerge in the near term.
• India's monthly toluene demand stands at approximately 57,000 metric tons, of which around 9,600 metric tons are produced domestically—primarily by Reliance Industries Ltd (RIL) and Bharat Petroleum Corporation Ltd (BPCL). The remaining 45,000 metric tons are met via imports.

Market news

• In the global energy markets, upstream crude benchmarks displayed mixed performance:
  A. WTI crude fell by 1.32%, closing at $60.39 per barrel
  B. Natural gas rose by 0.40% to $3.26/MMBtu
• Feedstock Prices
  1. FOB Singapore Naphtha: $561/MT
  2. FOB Korea Toluene: $669/MT
  3. FOB Korea Benzene: $709/MT

Expert Opinion

• Experts expect a mixed trend in the near term amid prevailing bearish sentiments and corrections in crude oil benchmarks. Refiners continue to operate under margin pressure and require a recovery of $50–60/MT to reach breakeven levels, especially in light of narrowing spreads for both naphtha and toluene.
• In this context, buyers are advised to adopt a wait-and-watch strategy until further corrections in naphtha or toluene prices provide better clarity and improved buying opportunities.