What are the key supply-demand dynamics shaping China's toluene market?

What are the key supply-demand dynamics shaping China's toluene market?
China's toluene capacity reached roughly 25.4 million tons per year, with Sinochem Quanzhou as the largest producer at 880,000 tons/year, followed by Sinopec Hainan Refining at 848,000 tons/year. In 2021, capacity expanded by 3.36 million tons to 20.4 million tons, though output was only 8.58 million tons, indicating significant underutilization. The product's strategic importance lies in its role as a feedstock for PX and downstream polyester chains. More recently, 2025 production surged to 16.06 million tons, up 10.1% year-on-year, driven by emerging demand from lithium battery electrolyte solvents and biodegradable material monomers. This growth reflects both traditional aromatics integration and new application areas reshaping the demand landscape.