Drastic Reduction of Toluene Output in 2009      

By the end of 2009 China's total capacity of producing toluene already exceeded 4.70 million t/a, the output was 990 000 tons only and the import amount was 790 000 tons. In spite of the capacity expansion, the output reduced drastically in 2009. The main reason was that the two oil giants Sinopec Corp. and PetroChina Company Limited increased the consumption proportion of toluene in oil product blending and reduced the amount for sales.
   With the drastic reduction of the domestically made toluene, imports surged. China imported 790 000 tons of toluene, more than doubled the import amount in the previous year. Major import sources remained unchanged, such as Korea, Japan and Thailand. The amount imported from Korea accounted for more than a half of the total import amount.
   The toluene market in China in 2009 could be divided into several stages. The period from January to July was the stage of price rise. The period from August to September was the stage of price reduction. The period from October to December was the stage of price rebound. The highest price in the year appeared at the end of the year, being around RMB7 100 per ton.
   Judging from the market status in 2009, the price of toluene was maintained at a high level at the year end. Owing to some favorable factors in the market, the mentality for price rise was quite strong. Some unfavorable factors, however, brought a considerable pressure on the market. The market was therefore in a stalemate. In the long term, however, the price is expected to rise.
   Due to various unfavorable factors such as the financial crisis worldwide, the aggravation of the external policy environment, the price rise of upstream raw materials and the reduction of the downstream demand, the market status and the price trend of toluene in 2010 have become a focus of attention. Pressure will become small in the downturn, the price of toluene will vibrate and follow with the price of crude oil.  

New Capacity of Toluene in China in 2008 and 2009   
Producer                                                                           Capacity (t/a)
Sinopec Zhenhai Refining & Chemical Co Ltd    145 000
      expanded to 200 000
Sinopec Shanghai Petrochemical Co Ltd       110 000
     expanded to 220 000
Sinopec Nanjing Refinery                    114 000
Zhejiang Hebon Chemical Co Ltd              180 000
Sinopec Guangzhou Petrochemical Co Ltd      100 000
CNOOC and Shell Petrochemical Co Ltd        120 000
Sinopec Qilu Petrochemical Co Ltd           170 000
PetroChina North China Petrochemical Co Ltd    140 000
Sinopec Tianjin Petrochemical Co Ltd         275 000
PetroChina Dalian Petrochemical Co Ltd      450 000
PetroChina Dushanzi Petrochemical Co Ltd    250 000
Source: CNCIC


Output and Consumption of Toluene in China
         in Recent Years          (t)
Year    Output      Import    Export    Apparent consumption
2005    1 103 000    805 500    1 700    1 906 300
2006    1 330 000    566 600    2 500    1 894 100
2007    1 510 000    444 600    2 100    1 952 500
2008    1 600 000    273 600    2 100    1 871 500
2009    990 000    790 000    8 000    1 772 000
Source: CNCIC


Toluene Imports from 2005 to 2009
Year    Imports (t)     Growth YOY (t)
2005    806 008     -11 480
2006    567 136     -238 872
2007    444 637     -122 499
2008    273 583     -171 054
2009    790 934     +517 351
Source: CNCIC