Toluene and MX underperform other aromatics, due to fading blending boom

Since the beginning of this year, especially since April, China domestic toluene and MX markets have continued to show a weak downward trend. In East China market, for example, the price of toluene fell from a high of 8,100yuan/mt at the beginning of April to 7,330yuan/mt by the end of the month, and MX price dropped from 8,020yuan/mt to 7,520yuan/mt, representing significant declines.

In the Shandong region, the declines in toluene and MX prices were even more obvious, with cumulative decreases of about 1,000yuan/mt over the period. However, other aromatics such as benzene, styrene, and PX did not experience the same deep declines as toluene and MX. Then, why have toluene and MX exhibited a relatively independent and persistently weak trend?

From March to April, the operating rates of China domestic toluene and MX continued to decline, with MX operating rate falling from 84.7% in early March to 77.2% recently. This round of reduction was primarily driven by two factors: firstly, March to April is the traditional peak season for plant maintenance in China, with several units undergoing scheduled shutdowns for overhaul; and secondly, due to geopolitical disruptions limiting crude oil supply, some refineries proactively reduced their operating rates. As a result, the supply of toluene and MX in the domestic market has contracted significantly.

Under the circumstance that supply is not particularly loose, the persistent weakness in the toluene and MX markets is mainly driven by sluggish demand.

As shown in the chart above, the profitability of the short-chain process of PX based on MX has been very impressive, even reaching historical highs for this period. However, this has not driven up MX prices. Although the processing spread is high, due to industry structure and capacity constraints, such profitability cannot be translated into large-scale procurement demand for MX.

Since 2025, new PX capacity additions in China have essentially stalled, with no new plants coming online. The existing facilities have limited external demand for MX, and most had already reached their previous procurement ceilings.

An even more critical factor is the poor performance of the gasoline market this year, which has significantly reduced the economic viability of using toluene and MX as blending components, thus compressing the consumption in the largest application.

Against the backdrop of the fading blending enthusiasm, relying solely on PX-side procurement is insufficient to support the entire MX market, leaving prices in the lack of advancing momentum. Toluene faces a similar dilemma: demand from both China domestic blending and disproportionation is weak, with only export demand providing some support. Overall demand remains insufficient, and prices similarly lack upward momentum.