Global Toluene Market Size (2024 - 2030)

The global toluene market achieved a valuation of USD 28.02 billion and is poised to attain USD 44.99 billion by the conclusion of 2030. Anticipated within the forecast period spanning from 2024 to 2030, the market anticipates a growth rate of 7%.

Industry Overview

Toluene, an odorless liquid with a fragrance akin to benzene, exhibits high flammability and can cause irritation to the skin, eyes, lungs, and nasal passages. Present in crude oil in minute quantities, it undergoes separation during the catalytic reforming process utilized for gasoline production, as well as in the manufacturing of ethylene or coke from coal. Distillation or solvent extraction processes are employed for its separation. Its utilization often extends to the creation of key compounds such as benzene and Xylenes, with derivatives like toluene diisocyanate (TDI) playing a vital role in various industries. Notably, the production of flexible polyurethane foams involves the incorporation of TDI, while coatings and elastomers are also prominent applications. Market offerings typically include three standard toluene grades: TDI grade, nitration grade, and commercial grade.

Nevertheless, toluene prices remain sensitive to fluctuations in crude oil prices, and any disruptions in crude oil production can impact its supply. Despite this, the global toluene installation capacity stands prepared to meet the worldwide demand. Additionally, due to its high volatility, toluene is subject to various health and safety regulations. Its presence in commonplace products like marker inks and paints has unfortunately led to its misuse as a recreational substance in certain regions worldwide. Prolonged exposure to toluene can result in toxicity and subsequent toluene poisoning, characterized by central nervous system effects such as fatigue, hallucinations, ataxia, coma, along with symptoms like vomiting and respiratory depression.

Impact of COVID-19 on the Industry

The sudden onset of the COVID-19 pandemic in 2020 significantly impacted the global toluene market. Stringent national lockdown measures implemented in the initial half of 2020 had adverse effects on numerous downstream industries, enterprises, and institutions. The global toluene demand faced substantial hindrances amidst prevailing uncertainties, leading to disruptions in the supply chain. However, post-pandemic recovery showcased an upward trajectory in market growth owing to heightened demand from the paint and coatings industries.

Market Drivers

Increasing Demand in Petrochemical Industry to Propel Market Growth

The market experiences an upsurge in demand attributed to its classification as an aromatic compound, owing to the presence of a benzene ring in its chemical structure. The escalating need for aromatics within the petrochemical sector, catering to the production of elastomers, agrochemicals, dyes, etc., fuels this growth. Toluene is industrially produced through two primary methods: pyrolyzing gasoline, derived from naphtha splitting, and extracting it from reformate, a byproduct of extensive naphtha cracking.

Utilization of Toluene in Benzene and Xylene Driving Market Growth

A significant portion of toluene consumption is directed towards the production of other chemicals like benzene and xylene. Benzene, xylene, and their derivative compounds account for over half of the global toluene utilization. These compounds find extensive applications across various sectors including paints, coatings, chemical manufacturing, pharmaceuticals, mining, construction, and defense, thereby sustaining the high demand for toluene based on its commercial significance and foundational role in essential chemical production.

Market Restraints

Concerns Regarding Substance Toxicity to Pose Market Growth Challenges

The market outlook suggests a negative trend in toluene demand across diverse sectors due to apprehensions surrounding its high toxicity. However, toluene stands as a viable substitute for benzene in specific applications, owing to its comparably lower toxicity profile.

Market Segmentation

Global Toluene Market - By Derivatives Type

• Benzene and Xylene
• Solvents
• Gasoline Additives
• Toluene Diisocyanate
• Others (TNT, Benzoic acid, Benzaldehyde)

The toluene market is categorized into Benzene and Xylene, Solvents, Gasoline Additives, Toluene Diisocyanate, and Other derivatives such as TNT, Benzoic acid, and Benzaldehyde. The dominance of the Benzene and Xylene segment, holding a market share of 56.45% in 2021, is attributed to the increasing use of benzene in the textile industry and xylene in the paint & coatings and chemical sectors.

Global Toluene Market - By End-User

• Building and Construction
• Automotive
• Oil and Gas
• Paints and Coatings
• Pharmaceuticals
• Others

The market segmentation by end-use includes building and construction, automotive, oil and gas, paints and coatings, pharmaceuticals, and other sectors. Leading with a market share of 24.78%, the paints and coatings industry is expected to maintain its position in the global toluene market. The building and construction sector is also poised for rapid growth, driven by numerous planned development projects.

Global Toluene Market - By Geography & Region

• North America
• Europe
• Asia-Pacific
• Latin America
• The Middle East and Africa

The toluene market is geographically divided into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa regions. The Asia-Pacific region currently dominates the global toluene market, primarily due to robust consumption in countries such as China, South Korea, India, Taiwan, and Japan. Anticipated market domination by emerging economies like China and India, driven by increased demand for toluene downstream products, is expected throughout the forecast period. Factors such as the US-China trade conflict and evolving trade policies may influence market growth.

In Europe, high toluene prices have been influenced by rising crude oil costs and production challenges. Post-BREXIT trade policy changes might impact the regional market dynamics. Latin America's market expansion has faced challenges due to political and economic instability, but growth is expected as conditions improve. The Middle East and Africa are significant producers of toluene, with several manufacturing facilities located in the region.

Global Toluene Market - By Companies

1. Exxon Mobil Corporation (USA)
2. SK Global Corporation Limited (South Korea)
3. Zhenhai Refining and Chemical Company (China)
4. Marathon Petroleum Corporation (USA)
5. PetroChina Company Ltd.
6. Flint Hills Resources LLC (USA)
7. Sinopec Shanghai Petrochemical Co. Ltd. (China)
8. Formosa Chemical & Fibre Corporation (Taiwan)
9. Cepsa (Spain)
10. CNOOC Limited (China)
11. Hengli Petrochemical (Dalian Complex) Co. Ltd. (China)
12. LyondellBasell Industries N.V. (USA)

Recent Developments in the Global Toluene Market:

• Business Expansion: In 2021, PPG announced the completion of its US$13 million investment in its paint and coatings plant in Jiading, China. This investment included the addition of eight new powder coating production lines and an expanded powder coatings technology center, aimed at bolstering PPG's R&D capabilities. The expansion is projected to increase the plant's capacity by over 8,000 tonnes annually.
• Government Investments: In 2021, the Indian government allocated INR 233.14 crore (USD 32.2 million) to the Department of Chemicals and Petrochemicals in the Union Budget 2021–22. This investment aims to enhance domestic manufacturing and exports in the chemical industry through a potential production-linked incentive (PLI) scheme, thus fostering growth in the country's toluene market.

Merger & Acquisition: In 2019, Sinopec-SK, manufacturers of petrochemicals and related products, along with Wuhan Petrochemical Co. and SINOPEC, reached an agreement to acquire the SINOPEC-owned Wuhan refinery. The refinery produces 25 different chemicals, including gasoline, toluene, and jet aircraft fuel, in a transaction valued at USD 1.9 billion.