The relevant information this week is as follows:
1. Raw material
Crude oil: Brent and WTI crude
oil both rose slightly, but are still at relatively low levels. OPEC+’s
production reduction discussion had to be postponed from the 26th to November
30th due to the current stalemate. Due to the current global economic
recession, whether or not to reduce production will not make a fundamental
difference to OPEC+ members; except for Saudi Arabia’s voluntary reduction of 1
million barrels, the attitudes of the other parties are unclear. It is almost
certain that the set goal of OPEC+ production cuts is not to recover oil prices
but to prevent further declines.
Natural gas: Natural gas is currently entering its peak season, and the JKM index continues to rise.
2. Production capacity
Among the country’s major production and refineries, Gaoqiao is suspending, Maoming is restoring, and the rest are in normal production. However, Daqing Refining and Chemical Co., Ltd. (about 1,000 tons), as a major producer, has to cut production by 50% to cope with the downward trend due to serious inventory backlog and limited sales.
3. Stock
Based on news from multiple information platforms, the total domestic paraffin inventory has been rising steadily since the National Day. The market has been sluggish in recent weeks, but production has continued and is now at its highest level for the year.
4. Market demand
After the National Day, terminal demand was mainly due to rigid demand, and major dealers had almost no stockpiling behavior. Due to sales tasks, the market transaction prices of most models are lower than the listed prices. The Daqing market has seen transactions at about 200 yuan lower than the listed prices for two consecutive weeks.
5. Industry analysis overview
At present, the inventory pressure of major dealers and manufacturers is huge, but the rigid demand is obviously
insufficient. Facing the downward trend, manufacturers have no choice but to reduce production, and A-level dealers have to promote at a loss. However, until the inventory is cleared to a certain extent, there is almost no possibility of price increases.
6. Price expectations
Based on the above analysis, production costs continue to be low, inventory is large and demand is low, the actual transaction price is upside down, and a downward trend has taken shape, waiting for the listing price to fall.