Overseas demand boosts toluene exports from China

In Jan-Jun 2024, China toluene exports reached 292.3kt, up a whopping 116% from 135.1kt in the same period of last year.

From the chart above, it can be seen in the first half of 2024, toluene exports increased each month from the same period of last year.

In terms of the destinations of China toluene exports, in the first half of 2023, the exports mainly went to South Korea, Indonesia, Vietnam, India, Singapore, and Taiwan, with South Korea taking the biggest part.

In the first half of 2024, the quantity of toluene exports to Singapore, Taiwan and India increased significantly. The exports of toluene to Singapore and Taiwan reached a combined 143kt, up sharply from 29kt in the same period of last year. The exports to Singapore are shown in the chart below.

The toluene exported to Singapore is mainly used for gasoline blending. In the first half of 2024, demand for gasoline stayed good in Southeast Asia, and Singapore's gasoline exports rose compared to the same period last year. However, as local toluene and MX capacity is small, the country needs to import blending components. Meanwhile, South Korea's toluene exports to the US increased, but the quantity to Singapore reduced. As a result, China's toluene exports to Singapore rose.

In addition, FOB Korea benzene price hiked continuously in the first half of 2024, driving up TDP margins substantially to positive territory in Asia. The margin, represented by benzene + isomer-MX–2*toluene - $120/mt, averaged -$23/mt in the first half of 2023 but got widened to average $48/mt on FOB Korea basis in the first half of 2024. As a result, several TDP units entered to buy toluene. The toluene exported from Chinese mainland to Taiwan was mainly used for disproportionation.

In a conclusion, with demand picking up overseas, China toluene exports increased.