The global toluene market was valued at USD 24.5 billion in 2023 and is projected to grow at a CAGR of 2.7%, to reach USD 33 billion by 2036. Toluene is an aromatic hydrocarbon, a colorless liquid with a pungent odor. It is derived primarily from petroleum and natural gas and serves as a vital solvent and chemical building block in a wide array of high-demand applications. Toluene is highly versatile and is used as a solvent in paints, coatings, and adhesives. Mainly, more than 50% of toluene is used for producing chemicals like benzene, xylene, and other valuable substances.
With a total global capacity of around 49,300 kilo tons, toluene market has seen steady growth of 3% since 2016. This expansion has been largely driven by significant capacity additions in the Asia Pacific region, particularly in China, where nearly 5,000 kilo tons of toluene capacity were added in the last five years.
Asia Pacific accounts for over 65% of the world's toluene production. China ranks first globally with a market share of around 40%, with major players such as Shanghai Petrochemical, PetroChina Yunnan, Liaoyang Petrochemical, CNOOC, and Sinochem. During the forecast period, China's toluene capacity is anticipated to surpass 23,000 kilo tons, further solidifying its dominance in the global market.
Source: Secondary & Primary Research and Prismane Consulting estimates
North America accounts for 13% of the global toluene capacity, translating to around 6,200 kilo tons in 2023. USA is the largest market in the region with a market share of more than 80%, followed by Canada and Mexico. In the US, ExxonMobil, Chevron Phillips, CITGO, and BP are among the largest toluene manufacturers.
Western Europe's toluene capacity stood at around 3,000 kilo tons in 2023, with Germany accounting for more than 35% of the regional toluene capacity. Germany has more than 10 refineries manufacturing toluene with a combined capacity of more than 1,100 kilo tons. BP is the largest manufacturer with a production capacity of 175 kilo tons, followed by INEOS and Shell with a capacity of 170 kilo tons and 140 kilo tons respectively.
Global toluene demand is heavily concentrated in regions with a strong presence of refining and petrochemical operations, such as North America, Europe, Middle East and Asia Pacific. The global toluene demand stood at around 25,000 kilo tons in 2023, which has witnessed an average growth of 2.6% since 2016. Asia Pacific dominates the Toluene market accounting for more than 60% of the global market. China is the largest consumer in the region with a total demand of more than 7,700 kilo tons in 2023.
Toluene market is bifurcated into applications which include Benzene, Xylene, Solvents, TDI and Others. Benzene is the largest application accounting for more than 40% in the toluene market, followed by Xylene with 20% market share. Toluene is used as a precursor for the manufacture of benzene and xylene via hydrodealkylation. TDI is the fastest growing application in the toluene market, it is poised to grow at a CAGR of 3.5% primarily driving by it increasing usage in the production of flexible polyurethane foams for furniture, bedding, and automotive interiors.
Source: Secondary & Primary Research and Prismane Consulting estimates
Over the next five years, demand from the polyester sector is expected to drive toluene consumption in the Middle East, India, and Northeast and Southeast Asia. Mixed xylenes are produced from the transalkylation of toluene which is a key raw material used in the production of Purified Terephthalic Acid (PTA) and Dimethyl Terephthalate (DMT). These chemicals are further used to manufacture polyester fibers, films, and resins.
Toluene is also widely used in paints and coatings due to its effectiveness as a solvent, providing a smooth finish and making application easier. It serves as a solvent in various consumer and industrial products, including gels, sprays, hair dyes, detergents, and disinfectants. In these applications, toluene aids in the solubilization and incorporation of ingredients, ensuring the final product performs as intended and has the desired texture.
In pharmaceuticals, toluene is used as a solvent as well as in the synthesis of drugs as an intermediate. It is also used in the production of dyes to ensure the color spreads evenly on the material, in processing synthetic rubber to make it flexible, and in the preparation of resins to ensure they mix and harden properly. The global demand for toluene is expected to grow around 2.7% from 2024-2036, driven by strong demand for polyester fibers, benzene, paints, and other products.
The global toluene trade is dominated by key countries, including China, India, South Korea, Japan, and the United States, each playing a crucial role in both the import and export of this essential chemical. Global exports dipped by 7% during the pandemic but were soon recovered in the following two years.
China is one the largest toluene exporter in the world, with average exports of over 160 kilo tons during 2016-2022. China exported more than 500 kilo tons of toluene in 2023, priced at USD 900-930 per ton. The main countries China exports to are Singapore, India, South Korea, Vietnam, and Indonesia.
India is another major importer of toluene, mainly consumed in application such as automotive, electronics, and pharmaceutical. In 2023, India's toluene imports were around 570 kilo tons, an increase of 1% from the previous year. India sources toluene mainly from South Korea, Thailand, China, and Iran. Imports in India ranged between 370 kilo tons and 580 kilo tons from 2016 to 2023.
Toluene is a byproduct of crude oil refining, making its price closely tied to fluctuations in global crude oil prices. When crude oil prices rise or fall, production costs for toluene adjust accordingly, leading to price changes.
Western Europe has been a net exporter of toluene since 2016, with exports ranging between 460 kilo tons and 770 kilo tons. Germany is the largest exporter of toluene, with 185 kilo tons exported in 2023, at an average price of USD 1105-1136 per ton.
Until 2019, the United States was a net exporter of toluene, with more than 600 kilo tons exports. However, due to the closure of some refineries, including PBF Energy Partners LP, Hovensa, and Sunoco, the trade status of the country has shifted. Since 2020, the US has been an importer of toluene, with 590 kilotons imported in 2023, priced at USD 920-950 per ton. Over the last three years, toluene imports in the country have grown at an average rate of 11%.
Toluene is produced through the catalytic reforming process in refinery systems, with part of the reformate converted into benzene, toluene, and xylene (BTX). ExxonMobil, BP, Reliance ENEOS, Shanghai Petrochemical, The Kuwait Aromatics Company (TKAC), Samsung Total, and Braskem are some of the leading players in the toluene market with combined production capacity of 13,000 kilo tons.
Source: Secondary & Primary Research and Prismane Consulting estimates
ExxonMobil is one of the major players in the global toluene market with a total capacity of more than 2,000 kilo tons and plants located in USA, Netherlands, Thailand, Singapore, and South Africa. The company is planning on adding their first toluene plant in Huizhou, China with a production capacity of 120 kilo tons, which is anticipated to come onstream by 2025.
In India, Reliance is the largest manufacture of toluene with a market share of 74%. The company runs four manufacturing units located in Jamnagar, Hazira and Patalganga with combined capacity of over 2,000 kilo tons.
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