Toluene Market Strengthens with Rising Crude; Traders Quote Higher Prices
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Toluene prices increased by ₹1/kg today due to rising crude oil and naphtha costs. Importers’ offers stood at ₹78.00++ per kg (ex-Kandla) and ₹78.50++ per kg (ex-Mumbai). Demand is recovering in the packaging, paints, and coatings sectors, but remains weak for bulk drugs. Experts predict a bullish market trend, with geopolitical tensions and seasonal demand shaping price movements in the coming weeks.
Key Takeaways
- Toluene Prices Up: Prices increased by ₹1/kg, driven by crude oil and naphtha price increases.
- Supply Stable, Demand Growing: Seasonal demand from packaging, paints, and coatings is rising, while bulk drug sector demand remains weak.
- Market Dynamics: The naphtha-to-toluene spread fell below breakeven at $117, while the toluene-to-benzene spread remains profitable at $120.
- Import vs. Domestic Supply: India consumes 57 kt of toluene monthly, with RIL and BPCL supplying 9.6 kt domestically; the rest is imported.
- Price Outlook: Prices are expected to stay bullish due to rising crude prices and geopolitical tensions between China and the US.
Toluene Prices: Surge Amid Rising Crude Oil Costs
- Toluene prices have increased by ₹1/kg today, driven by a surge in upstream crude oil benchmarks. Importers' offers were quoted at ₹78.00++ per kg (ex-Kandla) and ₹78.50++ per kg (ex-Mumbai) for 60-day payment terms.
- Traders are offering even higher prices, with quotes at ₹78.00++ per kg (ex-Kandla) and ₹78.50++ per kg (ex-Mumbai) for immediate payment terms.
- The price surge is primarily attributed to the rise in crude oil and naphtha prices.
Toluene Supply & Demand: Growing Demand from Packaging & Coatings Sectors
- The supply scenario remains largely stable. In February 2025, liquidation showed a significant improvement compared to December and January. Demand recovery is being led by the packaging, paints, coatings, and ink sectors, as seasonal requirements have picked up. However, demand from the bulk drug segment remains sluggish due to weak downstream consumption.
- From a BTX perspective, the naphtha-to-toluene spread has narrowed from $130 to $117, falling below the breakeven mark of $150. In contrast, the toluene-to-benzene spread remains favorable at $120, well above the breakeven threshold of $90.
- India’s monthly toluene consumption stands at approximately 57 kt, with domestic producers such as Reliance Industries Ltd. (RIL) and Bharat Petroleum Corporation Ltd. (BPCL) supplying around 9.6 kt per month. The balance demand of nearly 45 kt is met through imports.
Global Market News
- On the global front, upstream crude oil benchmarks witnessed minor fluctuations. WTI crude oil prices registered an increase of 0.81%, settling at $71.60 per barrel. Natural gas prices also saw a notable rise of 0.22%, closing at $3.36/MMBtu.
- Feedstock Prices:
1. FOB Singapore Naphtha: $653/MT.
2. FOB Korea Toluene: $770/MT.
3. FOB Korea Benzene: $890/MT - Pertamina, a key PX producer based in Cilacap, Indonesia, commenced a plant turnaround in late December 2024. The facility has a production capacity of 270 kt per annum of PX.
Expert Opinion: Bullish Trend Expected in Toluene Prices
- It is anticipated that there will be a bullish trend in toluene prices in the coming weeks, primarily driven by rising upstream crude oil prices and ongoing geopolitical tensions between China and the US, which have led to tariff impositions.
- Additionally, seasonal activity in the paints and coatings sector is expected to provide short-term price stability. Buyers are advised to remain vigilant and closely monitor market conditions.
Daily Market Report
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