Preface: Before the holiday, international crude oil prices rose strongly, providing a favorable atmosphere for the commodity market. Additionally, as the May Day holiday approached, downstream buyers replenished stocks, leading to a noticeable improvement in spot transaction volumes compared to earlier periods. Against the backdrop of a favorable external atmosphere, replenishment of export orders, and the still-open arbitrage window from Shandong to surrounding regions, refineries achieved smooth sales and successful inventory reduction, entering the pre-holiday destocking phase. However, with the holiday approaching, logistics and transportation were restricted, and the fluctuation range of crude oil widened, causing the market's sentiment for chasing gains to recede.

I. Comparison of International Crude Oil Prices During the May Day Holiday

Table 1: Comparison of International Crude Oil and Related Product Prices in USD (Unit: USD/barrel)

| Product | April 29 | May 4 | Change |
| --- | --- | --- | --- |
| WTI | 106.88 | 106.42 | -0.46 |
| Brent | 118.03 | 114.44 | -3.59 |

Data Source: chempricehub Information

Geopolitical conflicts in the Middle East continue to influence international oil prices. During the holiday period, oil prices fluctuated significantly, mainly affected by factors such as peace talks between the US and Iran and navigation through the Strait of Hormuz.

Table 2: Comparison of International Aromatics Product Prices (Unit: USD/ton)

| Product Name | Price Type | April 29 | May 4 | Change |
| --- | --- | --- | --- | --- |
| Naphtha | CF Japan | 1044.25 | 1027.25 | -17 |
| Toluene | FOB Korea | 1034 | 1081 | 47 |
| Xylene | FOB Korea | 1078 | 1087 | 9 |
| Benzene | FOB Korea | 1119 | 1119 | 0 |
| PX | CFR China | 1267.33 | 1264 | -3.33 |
| SM | FOB Korea | 1355 | 1332 | -23 |
| MTBE | FOB Singapore | 1054.99 | 1057.18 | 2.19 |

Data Source: chempricehub Information

During the holiday, the Chinese market was closed, and there were only two trading days in USD. With wide international fluctuations, market participants adopted a cautious attitude, and their willingness to operate was limited. International aromatics product prices moved in line with oil price fluctuations.

In other news, South Korea's toluene imports in April were 45,000 tons, while exports were less than 30,000 tons. Xylene imports were 19,000 tons, and exports were 45,000 tons. Among the aromatics products that can be arbitraged between Asia and the US, only benzene was flowing, with South Korea exporting 18,000 tons of benzene to the US.

II. Comparison of Shandong Toluene and Related Product Prices During the May Day Holiday

Table 3: Comparison of Shandong Gasoline Aromatics Product Prices (Unit: yuan/ton)

| Product Name | April 30 | May 5 | Change |
| --- | --- | --- | --- |
| 92# Gasoline | 8016 | 7981 | -35 |
| Toluene | 6925 | 6800 | -125 |
| Xylene | 7020 | 6915 | -105 |
| Mixed Aromatics | 6200 | 6100 | -100 |
| Trimethylbenzene | 6120 | 6200 | 80 |
| MTBE | 6480 | 6450 | -30 |
| Alkylate | 8600 | 8600 | 0 |

Data Source: chempricehub Information

During the holiday, the trading atmosphere in the gasoline and feedstock markets in the Shandong region was relatively weak, with only a brief improvement in transaction sentiment during the crude oil price rally. At the same time, disrupted logistics and transportation during the holiday added resistance to market transactions.

Table 4: Comparison of Shandong Refinery Toluene Product Prices (Unit: yuan/ton)

| Company Name | April 30 | May 5 | Change |
| --- | --- | --- | --- |
| Dongfang Hualong | 6850 | 6800 | -50 |
| Qicheng Petrochemical | 6850 | 6850 | 0 |
| Zhenghe Petrochemical | 6870 | 6850 | -20 |
| Youtai Technology | - | - | - |
| Wudi Xinyue | 6903 | 6803 | -100 |
| Dongming Petrochemical | 7050 | 6900 | -150 |
| Yatong Petrochemical | 6920 | 6800 | -120 |
| Dongying Qirun | 6920 | 6800 | -120 |
| Huaxing Petrochemical | 6900 | 6800 | -100 |
| Jingbo Petrochemical | 7000 | - | - |
| Yulong Petrochemical | 6800 | 6750 | -50 |

Data Source: chempricehub Information

During the holiday, the overall production and sales of toluene refineries in Shandong failed to balance, with the average production-to-sales ratio only reaching 23%. However, because some refineries had successfully destocked before the holiday and generally pre-sold volumes up to around the 3rd of the month, the actual inventory levels of these refineries were better than the production-sales data suggests.

III. Post-Holiday Forecast

Due to sluggish refinery sales during the holiday, refineries' official list prices are expected to be lowered, putting downward pressure on market offers. Overall, the market is dominated by news of a potential relaxation of refined oil product export quotas in May. However, given the high gasoline inventory levels domestically, whether this positive factor materializes and provides substantial support to the toluene market remains limited. State-owned refineries' strategy of "reducing oil output to increase chemical production" has led to an overall increase in toluene production schedules for May, raising market selling pressure. On the demand side, although downstream players such as Xintai Petrochemical, Tangshan Dimu, and some disproportionation sectors are increasing purchases, this only has a regional impact on prices. Furthermore, while the export window is currently open, the actual difficulty of executing export operations remains, creating a variable impact on toluene.