Published March 2016
Toluene is used in the manufacture of benzene, p-xylene for polyethylene terephthalate (PET) solid-state resins, and toluene diisocyanates (TDI) for polyurethane applications, and is widely used as a solvent.
Throughout the world, consumption in virtually every region was negatively impacted by the economic recession in 2008 and/or 2009. Production in North America and Western Europe declined 8% and 12% per year, respectively, from 2007 to 2009. However, production in the Middle East, Northeast Asia, and Southeast Asia increased during the same period. In the next five years, the fastest-growing regions will be the Middle East, the CIS and Baltic States, and the Indian Subcontinent.
However, demand in developing regions such as China, Thailand and the Middle East saw continued growth during this period. As global economies begin to slowly recover, toluene markets are anticipated to improve.
The following pie chart shows world consumption of toluene:
Since 2010, world toluene consumption has grown at about 1.5% per year. In chemical and solvent applications (gasoline blending excluded), however, the growth rate was only 0.8% per year.
About 50% of all toluene was consumed to make on-purpose benzene, mixed xylenes, and para-xylene in 2015. In the last five years, this market has increased by only about 0.4% per year.
In 2015, consumption of recovered toluene for blending into gasoline accounted for about 22% of total toluene consumption. Toluene is inherently valuable for use in the gasoline pool, both to build octane and to reduce vapor pressure. This is particularly true when ethanol is being blended into gasoline, because ethanol, although high in octane, also has a high vapor pressure.
Over the next five years, good demand from the polyester sector will result in higher volumes of toluene being converted into mixed xylenes and para-xylene. Toluene consumption for benzene/xylenes is expected to increase at an average rate of about 6.5% per year for the next five years.
TDI production is the second-largest single-derivative market for toluene. Stronger demand for polyurethanes has resulted in growing demand for toluene from TDI. Continued investments in developing countries and anticipated recovery in global markets will result in average annual growth for TDI production of just over 4%, with double-digit growth anticipated in the Middle East and India.
Consumption in three regions—China, the Middle East, and Southeast Asia—will account more than 70% of the toluene volume growth in the next five years, as demand for toluene increases at about 4% per year, driven by strong growth for products in its value chain, especially benzene and para-xylene.