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

Global Toluene 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.

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.