20240708~20240714 paraffin market analysis of China

The relevant information this week is as follows:

1. Raw material

Crude oil: During this statistical period, international crude oil prices ended their previous four-week rally, with Brent crude oil falling to $85.49, down about $1.3. At the beginning of this week, as the possible ceasefire negotiations in Gaza eased tensions in the Middle East, oil prices began to fall. However, as the EIA released crude oil-related data on Wednesday, the unexpected demand growth brought a rebound in crude oil prices.

In the short term, the fluctuation of crude oil prices is mainly affected by the situation in the Middle East and the summer demand in the United States. In the long term, the oil price is likely to rise for the following reasons: 1) Based on the decline in the US CPI (Consumer Price Index) in June, CME Fed Watch believes that the probability of a rate cut at the September 17-18 meeting is more than 90%. 2) There are still major differences between the negotiating parties involved in the situation in the Middle East, and there is still some uncertainty in the market.

2. Production capacity

Among the major refineries in the country, Maoming and Lanzhou has stopped production and the rest are operating normally.

Period	Factory	Status
20240708—0714	Daqing Pec	Normal
20240708—0714	Daqing Ref & Che	Normal
20240708—0714	Dalian Pec	Normal
20240708—0714	Fushun Pec	Normal
20240708—0714	Lanzhou Pec	Suspended
20240708—0714	Jingmen Pec	Normal
20240708—0714	Gaoqiao Pec	Normal
20240708—0714	Maoming Pec	Suspended
20240708—0714	Jinan Ref & Che	Normal
20240708—0714	Nanyang Pec	Normal
20240708—0714	Panjing Beiran	Normal

 

3. Stock

This week, Sinopec and PetroChina both raised prices for their paraffin wax models to varying degrees. The paraffin wax market is likely to enter an upward cycle, and all parties are actively purchasing goods. There are about 12,000 tons of remaining inventory in China.

4. Market demand

Downstream enterprises purchased goods on demand and most distributors began to stock up. Among them, the high melting point crude paraffin wax models increased significantly due to the candle industry’s stocking in the second half of the year, and the transaction was hot.

5. Industry analysis overview

Sinopec made its first price increase adjustment in nearly two months as expected, with an increase of 50 to 100 yuan; PetroChina has made price increases for three consecutive weeks, and this adjustment involves a wider range of models and a larger range, with the highest reaching 200 yuan. However, Fushun Refinery has not adjusted the price of paraffin wax, and its main model, fully refined paraffin wax, has a significant price disadvantage compared to that of Jingmen Refinery. Given that Sinopec has only made one round of price adjustments, it is speculated that Sinopec is likely to raise its listing price again within two weeks.

6. Price expectations

Major refineries are gradually increasing their listing prices based on weekly sales, and it is expected that listing prices may rise again within two weeks, by 50 to 100 yuan per ton.