Toluene Market in China, 2015
Year:2016 ISSUE:20
COLUMN:ORGANICS
Click:291    DateTime:Nov.07,2016
Toluene Market in China, 2015

By An Chao, China National Chemical Economic and Technical Development Centre

Supply

At the end of 2015, China’s toluene capacity was 8.43 million t/a, output was 5.31 million tons and the operating rate was around 63%. Table 1 shows the major toluene producers in China in 2015.
Toluene capacity has increased from 1.66 million t/a in 2005 to 8.43 million t/a in 2015, with an average annual growth of 17.6%. Output increased from 900 kt in 2005 to 5.31 million tons in 2015, with an average annual growth of 19.4%. Figure 1 shows the capacity and output of toluene in China in recent years.
Toluene capacity expanded further in 2015. New units were built mainly in Northeast China, Shandong and South China. The 280 kt/a toluene unit in CNOOC Ningbo Daxie Petrochemical Co., Ltd. is scheduled to start production in 2016. Other new units will mostly be put on stream at the end of 2016.

Table 1    Major toluene producers in China, 2015

Sinopec    Zhenhai Refining & Chemical Co., Ltd.    360
    Tianjin Petrochemical Co., Ltd.    405
    Wuhan Petrochemical Co., Ltd.    144
    Shanghai SECCO Petrochemical Co., Ltd.    160
    Maoming Petrochemical Co., Ltd.    140
    Jinling Petrochemical Co., Ltd.    354
    Luoyang Petrochemical Co., Ltd.    120
    Changling Petrochemical Co., Ltd.    70
    BASF-YPC Co., Ltd.    120
    Guangzhou Petrochemical Co., Ltd.    150
    Jiujiang Petrochemical Co., Ltd.    172
    Shijiazhuang Refining & Chemical Co., Ltd.    27
    Zhanjiang Dongxing Petrochemical Co., Ltd.    50
    Yangzi Petrochemical Co., Ltd.    300
    Shanghai Petrochemical Co., Ltd.    480
    Qilu Petrochemical Co., Ltd.    282
    Nanjing Refinery    114
    Fujian Refining & Chemical Co., Ltd.    250
    Yanshan Petrochemical Co., Ltd.    96
PetroChina    Guangxi Petrochemical Co., Ltd.    150
    Dushanzi Petrochemical Co., Ltd.    220
    Fushun Petrochemical Co., Ltd.    200
    Lanzhou Petrochemical Co., Ltd.    250
    Jilin Petrochemical Co., Ltd.    120
    Daqing Petrochemical Co., Ltd.    204
    Jinzhou Petrochemical Co., Ltd.    28
    Urumqi Petrochemical Co., Ltd.    30
    Renqiu Petrochemical Co., Ltd.    130
    Huachen Energy Co., Ltd.    60
    Dalian Petrochemical Co., Ltd.    450
    Jinxi Petrochemical Co., Ltd.    18
Other  enterprises    Qingdao Lidong Chemical Co., Ltd.    184
    Ningbo Hebang Chemical Co., Ltd.    150
    Heze Dongming Petrochemical Group Co., Ltd.    80
    Shandong Qi Wangda Group Co., Ltd.    70
    CNOOC Shell Petrochemical Co., Ltd.    280
    CNOOC Refining & Chemical Co., Ltd.    220
    Dragon Special Resin (Xiamen) Co., Ltd.    300
    Shenyang Paraffin-Wax Chemical Co., Ltd.    30
    Chambroad Petrochemicals Co., Ltd.    20
    Hebei Xinqiyuan Energy Technology Development Co., Ltd.    100
    Dalian Fujia Group Co., Ltd.    250
    Changyi Petrochemical Co., Ltd.    100
    Liaoning Huajin Chemical Industries Group Corporation    150
    Shandong Utai Technology Co., Ltd.    40 (first phase)
    Shandong Huifeng Petrochemical Co., Ltd.    110
    Linyi Runze Petrochemical Co., Ltd.    0
    Wuhan Kaishun Petrochemical Co., Ltd.    70
    WEPEC    400
    Panjin Baolai Petrochemical Co., Ltd.    -
    Zhuhai Refining & Chemical Co., Ltd.    150
    Shaanxi Yanchang Petroleum (Group) Co., Ltd.    70
    Total    8 430



Demand

The apparent consumption of toluene in China was 6.06 million tons in 2015, an increase of 84 kt and 1.4% over the previous year. Self-sufficiency was 87.7%, 3.3 percentage points higher than in the previous year. Inside China, the apparent consumption of toluene has grown in recent years. Table 2 shows the details.
China’s consumption of toluene in 2015 was concentrated in the manufacture of solvents, PX, TDI, benzoic acid and nitrotoluene. It was also used in making other chemicals such as benzyl chloride, caprolactam and p/m-cresol. The use in solvents was the most important application of toluene. The solvents were used mainly in adhesives, coatings, inks, pesticides, medicines and PU leather. The consumption of toluene in making solvents accounted for around 35% of the total. The consumption proportion was 22% for PX and 15% for TDI. Both the capacity and the supply of most toluene downstream products are in surplus today. Producers have turned to the export market and there are hardly any growth points for the demand. The standard for gasoline is upgraded to National V and restrictions are imposed on the use of other gasoline blending raw materials such as MTBE. Mixed aromatics now compete with toluene. With the increase of the supply and the improvement of the competitive advantage, the demand for toluene in gasoline blending will surely increase steadily.

Foreign trade

China is a net importer of toluene. The total trade volume of toluene in China was 755 kt in 2015 and the total trade value was US$529.3 million. Of the total, the import volume was 750 kt, a drop of 183 kt and 19.6% from the previous year and the export volume was 5 kt, an increase of 3 kt. Table 3 shows the import and export of toluene in China in recent years.
Major sources for the import of toluene to China in 2015 included Korea, Singapore and Japan. The volume imported from Korea was 299 kt, 39.8% of the total. Among provinces, Jiangsu imported the most toluene by far: 553 kt, 73.7% of the total. China exported little toluene, only 5 kt in 2015. Regions that export included mainly Shandong and Liaoning, and the volume exported accounted for 35.6% of the total. The main export destinations were Korea and DPRK.

Table 2    Consumption of toluene in China, 2013-2015  (kt)

Year    Output    Import volume    Export volume    Apparent consumption    Self-sufficiency (%)
2013    5 050    812    3    5 859    86.2
2014    5 040    933    2    5 971    84.4
2015    5 310    750    5    6 055    87.7


Table 3    China’s foreign trade in toluene

Year    Import    Export
    Volume
(kt)    Value
(US$ million)    Volume
(kt)    Value
(US$ million)
2011    655    704.6    8    9.2
2012    660    773.3    7    8.3
2013    812    977.7    3    4.1
2014    933    1 060.9    2    3.0
2015    750    525.0    5    4.3



Market price

The toluene market in China hit a new low in 2015, and the average price was the lowest of the past decade. The toluene market made an overall increase in the first half of 2015. With the increase of the crude oil supply, however, the price of crude oil futures in the international market dropped below the lowest point seen in the first half of 2015. The price of toluene in the domestic market therefore came down to RMB4 940/t in August. The demand for toluene in gasoline blending then offered a driver to the slack toluene market and the price of toluene picked up to RMB5 650/t in October. The price of toluene once again dropped to RMB5 050/t at the end of the year.
As the price of crude oil will remain low, the toluene market can hardly shake off the slackness in 2016. Due to the constant increase of labor costs, some toluene producers in China have gradually shifted production to countries with cheap labor in Southeast Asia. The demand for toluene in the domestic market will decline further, and the price of toluene will stay low.