GLOBAL TOLUENE MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Market Size and Trends

Global toluene market is estimated to be valued at USD 28.12 Bn in 2024 and is expected to reach USD 43.13 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 6.3% from 2024 to 2031.

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The demand for toluene is expected to be mainly driven by increasing consumption from the petrochemical industry. Toluene is widely used as a precursor to make benzene, which is further used to synthesize plastics, nylon, polyurethane and other chemicals. With growing textile and packaging industries globally, demand for various plastic derivatives is also increasing significantly thereby, positively impacting the growth of the toluene market. The consumption of toluene is increasing in industries such as pharmaceuticals, cosmetics as a solvent and in production of gasoline where it is blended to raise the octane number. These factors are anticipated to drive the global toluene market growth during the forecast period.

Rapid Growth in Plastic Industry

The plastic industry has witnessed tremendous growth over the past few decades and this growth looks set to continue going forward. Plastics are increasingly being used across many sectors like packaging, automotive, construction and more due to their lightweight and durable properties. Developing economies across Asia Pacific and Latin America are undergoing swift industrialization which requires massive infrastructure development. Plastics play a vital role in building homes, vehicles, factories, roads and other structures. Countries like India, China, Indonesia and Brazil are increasingly investing in improving basic amenities and services for their growing populations, and this boosts demand for plastics. Governments as well as private players are embarking on large scale infrastructure projects which rely heavily on plastics. Rising incomes in emerging markets are also driving up consumption of packaged consumer goods, electronics, automobiles which are majorly produced using plastics. Manufacturers prefer plastics over traditional materials due to their cost effectiveness and versatility. Plastic components help reduce weight and improve fuel efficiency of vehicles. These are durable enough for long lasting construction and are mostly resistant to corrosion. Plastics are also indispensable for packaging just about every type of consumer and industrial good ranging from food items, beverages, home care products, pharmaceuticals to machinery and equipment. The thriving e-commerce industry has further amplified plastic packaging consumption.

Market Concentration and Competitive Landscape

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The transportation sector has been experiencing steady growth globally over the past few years which has significantly driven the demand for toluene. Toluene is primarily used as a fuel additive in gasoline to increase the octane rating and provide better performance of vehicles. As more people are becoming mobile and economies are developing rapidly in different parts of the world, the vehicle fleet size has witnessed a substantial rise. According to the data from the World Bank, the motor vehicles per 1,000 people increased from 150 in 2010 to 180 in 2020 across various nations indicating the rising automobile usage. As the transportation networks and logistics continue to become more complex with advancements in road infrastructure, freight movement and passenger transportation needs, higher volumes of gasoline is required as fuel. This has led oil companies to increasingly blend toluene into gasoline to meet the growing energy needs of the transportation sector. The latest report from United Nations Conference on Trade and Development showed that international trade volumes grew by 4.3% in 2021 compared to the pre-pandemic level in 2019. The rebound in industrial production and mobility has driven greater demand for diesel and gasoline transported via road, rail, air and sea routes. More fuel consumption implies higher blending of toluene thereby positively impacting its market growth. With rising incomes, rapid urbanization and greater investment in public transit systems, transportation infrastructure is expected to further expand across major developing economies like China, India or Africa in the coming years. International agencies project passenger and freight traffic to surge significantly. This will not only increase the size of vehicle fleet on a yearly basis but also augment fuel usage. As transportation remains a key priority sector for government’s worldwide, continuous support is anticipated for promoting vehicular traffic. Therefore, the steady growth of transportation industry ensures ongoing and rising demand for toluene from the fuel additive market over the forecast period.

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The toluene market faces several challenges. Strict environmental regulations around the use and emissions of volatile organic compounds present obstacles to market growth. Substitutes such as xylene are increasingly displacing toluene in some applications like solvents. Oversupply conditions have led to reduced pricing power for producers. Fluctuating petrol feedstock prices also introduce uncertainty. With global economic growth projected to slow, demand may soften in major end-use industries for toluene like construction and automotive.

 Market Opportunities: Increasing population and prosperity across emerging markets

With population and prosperity increasing across emerging markets, demand for products like organic chemicals, coatings, and petrochemicals is expected to rise significantly. New applications continue to be developed as well, such as for gasoline additives. Consolidation among producers could allow greater efficiency gains and competitive strength. 

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In terms of derivative type, benzene & xylene segment is estimated to contribute the 41.2% share of the market in 2024, owing to their widespread applications in the chemical industry. Benzene and xylene are primarily used for producing various petrochemicals and organic compounds. Benzene serves as a crucial precursor to numerous chemicals including ethylbenzene, cumene, cyclohexane, nitrobenzene and maleic anhydride. These benzene-derived chemicals find multitude of applications ranging from plastics and resins to paints, coatings, adhesives and pesticides. Similarly, xylene is an important raw material for producing phthalates, which are commonly used as plasticizers to manufacture wide assortment of plastic goods. Xylene is also utilized to synthesize polyester fibers and resins. Significant growth of end-use industries like packaging, construction and automotive is propelling the demand for benzene- and xylene-based derivatives. Their versatile applicability and process compatibility continue to consolidate the position of benzene and xylene in the toluene derivatives market.

Insights, By Application: Healthcare Applications Steer Market Growth

In terms of application, drugs segment is estimated to contribute the 37.5% share of the market owing to extensive use of toluene in pharmaceutical industry. Toluene plays a critical role in pharmaceutical formulations as an aromatic solvent. It is extensively used for the extraction and crystallization of various active pharmaceutical ingredients (APIs). Ability of toluene to solvate a range of organic compounds with moderate polarity makes it suitable for purifying drug compounds. Its solvent properties help enhance the bioavailability of poorly water-soluble APIs. Moreover, toluene acts as an excellent coating agent and is widely utilized to prepare film-coating formulations. Escalating global demand for generic and novel drug formulations due to rising disease burden and geriatric population is fueling the consumption of toluene in pharmaceutical applications. Further augmenting the market growth is its expanding use in manufacturing cough syrups, expectorants and dispersible tablets.

Insights, By Production Process: Reformate Processes Dominate Production

In terms of production process, reformate processes segment is estimated to contribute the 36.8% share of the market owing to its widespread adoption across the industry. Reformate process involves catalytic reforming of naphtha into a high-octane product stream rich in aromatics like benzene, toluene and xylenes. This process yields a high-quality reformate containing around 20-25% aromatics and finds extensive application in gasoline blending. Reformate production is an attractive route due to the ability to upgrade low-octane naphtha into a high-octane product. Moreover, as refineries are increasingly focusing on complying with stringent environmental norms on fuel sulfur content, reformate production allows producing cleaner transportation fuels by removing sulfur. Additionally, aromatics produced via reformate process are readily deployable as chemical feedstock. Growing environmental regulations and rising energy demand globally are favoring reformate processes over other production technologies to meet the escalating needs for gasoline blending and petrochemical aromatics.

Regional Insights

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North America has remained the dominant region in the global toluene market over the past few years with estimated 37.7% share in 2024. The presence of several established end-use industries such as automotive, construction, and paints & coatings has led to consistent demand for toluene from the region. Countries like the U.S. and Canada have been among the top producers and consumers of toluene owing to strong economic growth over the past decade. The region is also a net exporter of toluene and supplies it to other emerging markets globally. Among factors contributing to North America's leading position is the availability of raw materials and developed petrochemical infrastructure to support fluid toluene production. Leading companies from the region have strong refining capabilities and distribution networks to cater growing internal demand. Additionally, stable growth in infrastructure development activities has boosted usage of toluene-based adhesives, sealants and paints in the construction industry.

Asia Pacific region has emerged as the fastest expanding toluene market globally. China represents a major portion of overall Asia Pacific demand due to its large chemical industry and manufacturing sector. Countries like India and Indonesia are also exhibiting rapid growth in toluene consumption backed by rising foreign investments and economic development. The growing consumption of toluene in various applications such as solvent, fuel additive and chemical intermediate in emerging APAC nations is a key driver for the region. Low production costs and inexpensive labor have attracted global players to set up manufacturing units in the region. This has improved the self-sufficiency of toluene supply and exports from Asia Pacific. Moreover, the increasing market penetration of international brands in the region due to changing consumer lifestyles and rising disposable income levels continue to drive the demand for toluene in applications like paints, adhesives and consumer goods.

Market Report Scope

Key Developments

• In December 2023, Covestro upgraded toluene diisocyanate plant
• In September 2022, Covestro introduced polyether polyols using biobased feedstock. The company is now offering renewable1 toluene diisocyanate (TDI) and methylene diphenyl diisocyanate (MDI) for the production of polyurethane foams. 
• In March 2022, Covestro expanded the range of renewable toluene diisocyanate (TDI) and provides it to customers from different regions. This TDI can be used as a raw material for flexible polyurethane foam.

*Definition: The toluene market includes companies involved in the manufacturing, distribution, and sales of toluene. Toluene is a clear, water-insoluble liquid with an aromatic hydrocarbon smell. It is primarily used as a solvent in paints, coatings, adhesives, lacquers, thinners, gasoline, and other industrial processes. The toluene market is driven by the growing demand from end-use industries such as building & construction, automotive, and oil & gas where toluene is use

Market Segmentation

•  Derivative Type Insights (Revenue, USD Bn & KT, 2019 - 2031)
  • Benzene & Xylene
  • Toluene Diisocynates
  • Gasoline Additives
  • Others
•  Application Insights (Revenue, USD Bn & KT, 2019 - 2031)
  • Drugs
  • Blending
  • Cosmetic Nail Products
  • Others
•  Production Process Insights (Revenue, USD Bn & KT, 2019 - 2031)
  • Reformate Processes
  • Pygas Processes
  • Coke/coal Processes
  • Styrene Processes
• Regional Insights (Revenue, USD Bn & KT, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • Rest of Middle East & Africa
• Key Players Insights
  • BASF SE
  • Braskem SA
  • Chevron Phillips Chemical Company LLC
  • China Petroleum & Chemical Corporation (Sinopec)
  • China National Petroleum Corporation
  • Covestro AG
  • CPC Corporation
  • Exxon Mobil Corporation
  • Formosa Chemicals & Fibre Corporation
  • INEOS
  • Lyondellbasell Industries NV
  • Mitsui Chemicals Inc.
  • Mitsubishi Chemical Corporation
  • Royal Dutch Shell PLC
  • SABIC
  • SK Innovation Co. Ltd
  • Total SA
  • Shiv Chemicals
  • Pure Chemicals Co
  • Akshar international