Toluene: weak external support, high price of biphenyl difficult to maintain

In March, the domestic toluene and xylene market showed an "m" shape trend, which is highly correlated with crude oil. On the one hand, affected by geopolitical tensions, the price of crude oil futures in Europe and the United States fluctuated and soared. WTI remained at a high level near us $105 / barrel for a long time, with the peak breaking through the high level of US $130 / barrel. The external support was strong, but the trend fluctuation triggered market concerns; On the other hand, the domestic epidemic broke out in March, local logistics conditions were limited, and the downstream chemical industry temporarily stopped to avoid risks. At the end of the month, the problem of accumulated storage of refined oil was aggravated, the rigid demand for oil transfer and chemical industry was weakened, and the market prices of toluene and xylene were lowered on the demand side.

At the beginning of this month, as European and American countries began to restrict oil imports to Russia, European and American crude oil futures continued to rise and break to a ten-year high; Affected by oil transfer and toluene disproportionation for self use, Shandong, Hebei and other places have a tight supply of goods. Under multiple favorable conditions, the East China toluene market continued its rise last month. The toluene market reached its peak since the second half of 2014 at the end of the first ten days, and the isomeric xylene market reached its peak since the end of February 2014 at the end of the first ten days,. However, with the easing of the situation in Russia and Ukraine and the change of position of some countries, and the local outbreak of the epidemic in China, the world's largest crude oil importer, the crude oil futures in Europe and the United States fell broadly, the market prices of toluene and xylene fell, and fell to the trough in the middle of the month. The market trend in the second half of the month is similar to that in the first half of the month, rising first and then falling as a whole. In the middle of the year, the situation between Russia and Ukraine became tense again. The market re examined the shortage of crude oil supply. The international oil price rose broadly. In addition, the supply of goods on the market was relatively tight, and the market focus of toluene and xylene moved up rapidly. However, due to the easing of the situation in Russia and Ukraine again in the last ten days, WTI fell below US $110 / barrel, coupled with the spread of the domestic epidemic, the transaction in the downstream refined oil market of biphenyl was not smooth, the demand for oil transfer was poor, the shipment in various regions was suffering, and the toluene and xylene markets fell again.

At present, the domestic epidemic trend is a great challenge for both external crude oil and the demand side of biphenyl. It is expected that the biphenyl market will remain weak in the short term, but the downward space supported by the cost side is limited. The future trend still needs to continue to pay attention to the domestic epidemic trend and raw oil market.