2025 has emerged as a pivotal year for China’s solvent oil industry, a core segment of the domestic petrochemical sector that underpins diverse downstream applications from coatings and printing inks to food processing and rubber manufacturing. Faced with a confluence of challenges—including structural overcapacity, environmental regulatory tightening, and weak downstream demand pull—the industry is navigating a phase of pressured development, marked by a noticeable downward shift in the price center and a critical upgrade in consumption structure. This analysis delves into the complete industry chain dynamics, 2025 supply-demand status, import-export patterns, and the defining future development trends shaping China’s solvent oil market, offering key insights for industry stakeholders.
What is Solvent Oil? Core Classification & Industrial Value
Solvent oil is a light oil refined from crude oil and other feedstocks, valued for its excellent dissolving and dispersing properties across industrial and consumer applications. Its classification is multi-dimensional, tailored to industrial usage needs:
• By boiling range: Low-boiling (60-90°C, e.g., 6# extraction solvent oil), medium-boiling (80-120°C, e.g., rubber solvent oil), and high-boiling (140-200°C, e.g., paint solvent oil).
• By chemical structure: Paraffinic, naphthenic, and aromatic solvent oils, each with unique performance characteristics for targeted applications.
• By application: Extraction, rubber, paint, cleaning, and ink solvent oils, covering over a dozen core industrial sectors.
As a foundational processing raw material, solvent oil forms an indispensable link in the petrochemical industry chain, with its market dynamics closely tied to the development of upstream crude oil processing and downstream manufacturing sectors.
Solvent Oil Industry Chain: Upstream Abundance, Midstream Restructuring, Downstream Diversification
China’s solvent oil industry chain features a clear three-tier structure—upstream raw materials & equipment, midstream refining & processing, and downstream application end-markets—with 2025 witnessing distinct dynamics across each link, particularly a shift in upstream cost support and midstream structural optimization.
Upstream: Naphtha as Core Feedstock, Ample Supply with Downward Price Trend
Naphtha is the primary raw material for solvent oil production, and its supply and price fluctuations directly determine the cost side of the solvent oil industry. China’s naphtha production reached 80.736 million tons in 2024, a year-on-year increase of 3.0%, laying a solid supply foundation. From January to August 2025, affected by routine refinery maintenance, naphtha output stood at 52.837 million tons (a slight 0.5% year-on-year decline), yet overall supply remained ample and unconstrained.
Price-wise, naphtha has trended downward since 2025, driven by crude oil price movements and domestic supply-demand fundamentals. By the end of September 2025, the market price of naphtha had fallen to 7,424 RMB/ton, a key factor pulling down the solvent oil price center and easing the cost pressure on midstream processors to a certain extent.
Midstream: Mature Market with Stabilized Capacity, Weak Production & Profit Pressures
China’s solvent oil midstream processing sector is a mature market that has undergone capacity optimization after a round of significant capacity reduction in 2020, triggered by overcapacity and cost pressures. In 2024, supply further contracted due to industrial policy adjustments and refinery maintenance, with total solvent oil production falling to 2.509 million tons, a 10.2% year-on-year drop. High production costs amid weak market demand squeezed the profit margins of midstream refineries, leading to low production enthusiasm and a state of weak supply matching weak demand in the market.
Midstream production technology mainly includes fraction cutting (atmospheric tower fractionation, narrow fraction recutting, catalytic reforming raffinate fractionation) and refining processes (caustic washing, clay treatment, hydrotreating), which are critical for improving solvent oil product quality. As environmental and product quality standards rise, midstream enterprises are accelerating technological upgrading, with low-efficiency small production units gradually being phased out.
Downstream: Diverse Applications, Demand Shrinkage Driven by Substitution & Industry Downturn
Solvent oil’s downstream applications span a wide range of core sectors, including coatings, edible oils, printing inks, rubber, pesticides, cosmetics, mechanical cleaning, and adhesives, with demand closely linked to the operating conditions of these industries. In 2024, the solvent oil market saw a notable decline in apparent demand, which reached 2.543 million tons (a 9.8% year-on-year decrease), driven by two key factors:
1. The edible oil processing sector faced raw material substitution, reducing the demand for extraction solvent oil;
2. The real estate industry downturn dragged down the development of downstream sectors such as coatings and adhesives, the largest consumption areas for solvent oil, leading to a sharp drop in demand for paint and rubber solvent oil.
The weak downstream demand has become the core constraint on the recovery of the solvent oil industry in 2025, with the market still in a phase of digesting demand pressure.
2025 Solvent Oil Market Core Status: Price Center Down, Imports Up for High-End, Exports Grow Amid Overcapacity
Against the backdrop of weak supply and demand, China’s solvent oil market in 2025 has seen distinct changes in price trends and import-export patterns, with the domestic market maintaining a basic self-sufficiency pattern while facing structural shortages of high-end products.
Price Trend: Annual Average Down, Center Shifts Lower Amid Cost & Demand Dual Pressure
Although 2024 solvent oil prices remained relatively high due to reduced supply and residual cost support (annual average price: 7,670.99 RMB/ton, a 4.05% slight year-on-year drop, fluctuating between 7,594-7,809 RMB/ton), 2025 has witnessed a clear downward shift in the industry price center. Driven by the continuous decline in upstream naphtha prices and the lack of effective demand pull, solvent oil prices have lost strong support, with the market entering a phase of low-to-medium range fluctuations. Short-term price volatility may still occur due to crude oil price swings and sporadic refinery maintenance, but the overall downward trend of the price center has become a definite trend.
Import & Export: Structural Imports Rise, Exports Grow to Alleviate Domestic Competition
China’s solvent oil market is largely self-sufficient, but 2024-2025 has seen structural changes in import and export volumes, reflecting the industry’s internal supply-demand mismatch and the push to explore overseas markets amid overcapacity:
• Imports: Imports reached 42,100 tons in 2024 (a 29.2% year-on-year increase), and 28,500 tons in January-August 2025. The growth in imports is mainly driven by the domestic structural shortage of high-quality, environmentally friendly solvent oil—a product segment where domestic enterprises have not yet fully met market demand, forcing downstream high-end users to rely on imports. Singapore (50.2%), Japan (27.3%), and the US (11.9%) are the top three import sources (US imports down 31.8% year-on-year due to tariff factors).
• Exports: Exports stood at 8,300 tons in 2024 (a 16.3% year-on-year increase), and 8,200 tons in January-August 2025, approaching the full-year 2024 level. Faced with domestic overcapacity and fierce market competition, solvent oil enterprises are actively exploring overseas markets, with Myanmar (32.3%) and Hong Kong (27.1%) as the main export destinations, mainly supplying general-grade solvent oil products.
Future Development Trends: Market Consolidation, High-End Upgrade & Green Transformation
Looking ahead, China’s solvent oil industry is set to move beyond the phase of simple capacity expansion and enter a new era of structural consolidation, high-end product upgrading, and green and environmentally friendly development. Driven by environmental policies, market competition, and downstream consumption upgrading, three core trends will define the industry’s development:
1. General-Grade Market Consolidation, Accelerated Elimination of Small-Scale Capacity
Stricter environmental protection policies, persistent structural overcapacity, and tight profit margins will continue to curb the production enthusiasm of midstream enterprises, leading to a gradual downward trend in the industry’s total capacity and output. Small production units with annual capacity below 100,000 tons, characterized by low efficiency, high emissions, and poor product quality, will face accelerated elimination. Market share will further concentrate in large-scale, integrated petrochemical enterprises with advanced technology, complete environmental protection facilities, and cost advantages, pushing the industry toward more standardized and concentrated development.
2. Consumption Structure Upgrade, High-End & Specialized Products Gain Market Share
The core direction of the solvent oil industry’s product structure adjustment is non-toxicity, refinement, and specialization. As downstream industries such as high-end coatings, electronic cleaning, and food processing raise higher requirements for the purity, environmental performance, and targeted performance of solvent oil, the demand for general-grade solvent oil will continue to shrink, while high-end products such as environmentally friendly low-aromatic solvent oil, high-purity paraffinic solvent oil, and customized specialized solvent oil will see rapid growth in market share. This structural upgrade will become the core growth driver for the industry, offsetting the decline in demand for general-grade products.
3. Short-Term Price Volatility, Green Products Maintain Firm Price Dynamics
Affected by crude oil price fluctuations, upstream naphtha cost changes, and the phased recovery of downstream demand, China’s solvent oil prices will remain in a volatile pattern in the short term. However, there will be a clear differentiation in price performance between product segments: general-grade solvent oil prices will face continued downward pressure due to oversupply, while environmentally friendly and high-performance high-end solvent oil products will maintain firm price dynamics supported by strong market demand and supply shortages, with significant profit margin advantages over general-grade products.
Conclusion: Navigating Pressure, Green & High-End Upgrade as the Core Development Path
2025 is a year of structural adjustment for China’s solvent oil industry, where pressured development coexists with transformation opportunities. The industry is currently facing multiple challenges, including weak downstream demand, a downward price center, and structural overcapacity, but these pressures are also forcing the industry to accelerate transformation and upgrading.
For solvent oil enterprises, the era of relying on scale expansion and low-price competition to gain market share has ended. The core path to sustainable development lies in technological innovation and product upgrading—accelerating the R&D and production of environmentally friendly, high-end, and specialized solvent oil products to meet the upgrading demand of downstream industries; optimizing production processes to reduce emissions and costs, in line with strict environmental protection policies; and exploring diversified markets, including expanding the export of high-end products to offset the pressure of domestic overcapacity.
As China’s manufacturing industry moves toward high-quality development and environmental protection requirements continue to rise, the solvent oil industry’s green and high-end transformation is not only a mandatory requirement for compliance but also the only way to break through the current development bottleneck. In the future, enterprises that can seize the opportunity of consumption structure upgrading and build core competitiveness in high-end product research and development will become the main winners of the industry’s structural consolidation.
