The relevant information this week is as follows:
1. Raw material
Crude oil: WTI crude oil continues to struggle around US$70 this week, with no hope of returning to US$90. Some analysts have even begun to interpret it politically. For example, Jeff Currie, former head of commodities research at Goldman Sachs, believes that the reason why oil prices have plummeted is because governments have shied away from their own alternative energy policies and promoted an increase in crude oil supply to relieve consumer pressure. Therefore, even OPEC+’s production reduction seems difficult to promote, and the United States is increasing crude oil supply on an unprecedented scale.
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, Maoming has suspended production, Lanzhou has temporarily suspended production, and the rest are operating normally.
|
Period |
Factory |
Status |
|
20240101—0107 |
Daqing Pec |
Normal |
|
20240101—0107 |
Daqing Ref & Che |
Normal |
|
20240101—0107 |
Dalian Pec |
Normal |
|
20240101—0107 |
Fushun Pec |
Normal |
|
20240101—0107 |
Lanzhou Pec |
Restore next week |
|
20240101—0107 |
Jingmen Pec |
Normal |
|
20240101—0107 |
Gaoqiao Pec |
Normal |
|
20240101—0107 |
Maoming Pec |
Suspended |
|
20240101—0107 |
Jinan Ref & Che |
Normal |
|
20240101—0107 |
Nanyang Pec |
Normal |
|
20240101—0107 |
Panjing Beiran |
Normal |
3. Stock
With production this week, the total domestic paraffin inventory has gradually increased, slightly more than 30,000
tons.
4. Market demand
Due to the impact of the ￥300 price reduction, downstream merchants began to restock, and A-level agents increased prices by ￥50~100 for mainstream models.
5. Industry analysis overview
On the first working day of the new year (this Tuesday), PetroChina and Sinopec couldn’t wait to announce that they would no longer use the mild “Insured sales” strategy this month and directly lower the listing price. Most models have dropped by ￥300, and some models have dropped by ￥250 to 400 due to supply and demand. Judging from the actual transaction prices in various markets, some merchants who were on the sidelines in December last year
are currently actively purchasing goods.
“Insured sales”: The manufacturer will give A-level dealers cash rebates based on the listed price. The amount of the cash rebate will be determined later based on the actual market performance.
6. Price expectations
It has to say that the price reduction of ￥300 is relatively large and met the current price reduction expectations. However, there is still a gap of about ￥1,000 compared to the price in the same period in 2023; the WTI oil price at that time was $76/Barrel, and the economic expectations were improving with the epidemic was about to end. Therefore, it is still more likely that prices will continue to decline.