The relevant information this week is as follows:
1. Raw material
Crude oil: WTI crude oil performed strongly this week. After falling below US$70 in December last year, the cycle average price returned to US$75, and even closed at US$78.01 this Friday. The main reason for this is 1) The United States has cut production by about 1 million barrels per day due to severe cold weather, and the impact will last for one month; 2) The United States’ GDP performance in the fourth quarter of 2023 was outstanding, with an
increase of 3.3%; 3) The Houthi armed forces attacked British oil tankers, further escalating the Red Sea crisis and highlighting shipping problems. In the long run, point 2 – the recovery of the US economy is crucial. In addition,
the People’s Bank of China will also lower the bank reserve ratio from February 5 to stimulate the economy. Therefore, even if demand is weak in the short term, the likelihood of oil prices falling below $70 is extremely low. Even if the U.S. interest rate cut comes, oil prices may rise to around US$80-90 as predicted by major analytical institutions.
Natural gas: Natural gas is currently entering its peak season, and the JKM index remains high.
2. Production capacity
Among the country’s major production and refineries, Maoming has suspended production, the rest are operating normally.
|
Period |
Factory |
Status |
|
20240122—0128 |
Daqing Pec |
Normal |
|
20240122—0128 |
Daqing Ref & Che |
Normal |
|
20240122—0128 |
Dalian Pec |
Normal |
|
20240122—0128 |
Fushun Pec |
Normal |
|
20240122—0128 |
Lanzhou Pec |
Normal |
|
20240122—0128 |
Jingmen Pec |
Normal |
|
20240122—0128 |
Gaoqiao Pec |
Normal |
|
20240122—0128 |
Maoming Pec |
Suspended |
|
20240122—0128 |
Jinan Ref & Che |
Normal |
|
20240122—0128 |
Nanyang Pec |
Normal |
|
20240122—0128 |
Panjing Beiran |
Normal |
3. Stock
The total domestic paraffin inventory fell by 5,000 tons, with the remaining inventory of about 20,000 tons.
4. Market demand
Last two weeks, due to the stimulation of price cuts and concerns about logistics inconvenience before the Spring
Festival, a large number of downstream manufacturers began to purchase goods. This situation continued this week.
5. Industry analysis overview
The paraffin wax market is relatively good this week, and manufacturers are picking up goods on demand. As paraffin prices are currently expected to be adjusted monthly, the market is expected to remain calm before
the Spring Festival.
6. Price expectations
Prices of paraffin are not expected to adjust again this month. There is still a possibility of price cuts next month to gradually return to a reasonable level.