20240729~20240804 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 plummeted by about $2 again, with Brent crude oil falling to $79.96 per barrel. Although EIA’s crude oil data this week still shows strong demand
in the United States, 1) weak future demand; 2) the war risk premium that has basically been waived; 3) OPEC+’s plan to cancel some production cuts in October, all make it difficult for oil prices to rise at this stage.

It is worth noting that Israel’s assassination of Hamas leaders this week has cast doubts on the already eased situation in the Middle East. In addition, the disclosure of US non-agricultural data also seems to have found some support for the bullish expectations of international oil prices. However, judging from futures trading data, international oil prices did not rise with the decline of the US dollar on Friday, but continued to fall, and rebounded a few hours later. Therefore, most traders are still bearish on the future supply and demand relationship, which is contrary to the performance of most institutions a few weeks ago that “short-term decline is possible, long-term bullish”, even though the probability of the Federal Reserve cutting interest rates in September is currently considered to be “100%”.

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
20240728—0804	Daqing Pec	Normal
20240728—0804	Daqing Ref & Che	Normal
20240728—0804	Dalian Pec	Normal
20240728—0804	Fushun Pec	Normal
20240728—0804	Lanzhou Pec	Suspended
20240728—0804	Jingmen Pec	Normal
20240728—0804	Gaoqiao Pec	Normal
20240728—0804	Maoming Pec	Suspended
20240728—0804	Jinan Ref & Che	Normal
20240728—0804	Nanyang Pec	Normal
20240728—0804	Panjing Beiran	Normal

 

3. Stock

This week, all types of paraffin wax have been raised in price by 100~150yuan/ton, and all parties are actively purchasing goods. There are about 11,000 tons of remaining inventory in China.

4. Market demand

Downstream enterprises purchased goods on demand and dealers are stocking up in large quantities, the market is
booming.

5. Industry analysis overview

This week, the listing price of various types of paraffin wax was raised again by 100~150 yuan, and traders generally added 200 yuan to the price. Although the current downward trend of oil prices is obvious, domestic demand is strong and production capacity is weak, so the price of paraffin wax is expected to rise.

6. Price expectations

The current market is booming, and there is still a gap of 300 yuan/ton compared with the same period last year, so it is more likely to continue to rise.