20241104~20241110 paraffin market analysis of China

The relevant information this week is as follows:

1. Raw material

Crude oil: During this statistical period, the international crude oil price rose by about US$2, and the average price of Brent crude oil was US$74.85 per barrel. Against the backdrop of sluggish demand, the rise was mainly due to OPEC+’s announcement of a postponement of its production increase plan and the Federal Reserve’s 25 basis point interest rate cut. Although Brent crude oil prices have broken through US$75 per barrel, with Mr.Trump’s confirmation of his election as the next president of the United States on November 6, many analysis agencies are bearish on forward oil prices. Analysts from Citi and JPMorgan Chase said that oil prices will fall below US$70 next year, and if OPEC+ increases production, oil prices may be lower. However, for the recent impact on international oil prices, as Mr.Trump vowed to impose more sanctions on Iran and Venezuela, this means that the global market may become more tense, which may push up oil prices. From the specific performance of oil prices, from 23:00 on the evening of November 6th to the early morning of the next day, the WTI oil price rose from US$70 per barrel to US$72 per barrel.

Overall, the downward pressure on oil prices is still relatively large, at least before Mr.Trump officially moves into the White House on
January 20th next year.

2. Production capacity

Among the major production refineries in China, Maoming and Dalian Petrochemical has stopped production, the rest of the refineries are operating normally.

Period	Factory	Status
20241101—1107	Daqing Pec	Normal
20241101—1107	Daqing Ref & Che	Normal
20241101—1107	Dalian Pec	Suspended
20241101—1107	Fushun Pec	Normal
20241101—1107	Lanzhou Pec	Normal
20241101—1107	Jingmen Pec	Normal
20241101—1107	Gaoqiao Pec	Normal
20241101—1107	Maoming Pec	Suspended
20241101—1107	Jinan Ref & Che	Normal
20241101—1107	Nanyang Pec	Normal
20241101—1107	Panjing Beiran	Normal

 

3. Stock

Paraffin inventories fell rapidly this week. Traders were active in purchasing goods at the beginning of the month. Currently, the national inventory is about 19,000 tons.

4. Market demand

The paraffin market is still good this week, mainly dealers buy goods. However, some resources are in short supply and the market price is high.

5. Industry analysis overview

This week, PetroChina once again raised the prices of most of its paraffin products by 50-100 yuan/ton, and some models increased by 200 yuan/ton; Daqing and Lanzhou refineries are included. Combined with last week’s analysis, Sinopec may also increase the prices of its paraffin products next week, especially for the Jingmen refinery.

6. Price expectations

Next week, Sinopec may adjust the prices of its paraffin products upward, but the current international oil prices are clearly on a downward trend, which in the long run will cause paraffin prices to start falling at the end of this month.