20241202~20241208 paraffin market analysis of China

The relevant information this week is as follows:

1. Raw material

Crude oil: International crude oil prices fell slightly during this statistical period, with the average price of Brent crude oil at US$72.56 per barrel. The Organization of Petroleum Exporting Countries (OPEC+) decided to postpone the resumption of production increases for another three months to stabilize oil prices. However, from the market point of view, this has failed to effectively boost market sentiment. Some analysts believe that crude oil prices have been confined to a narrow range since mid-October. Due to increased US production and sluggish Chinese demand, the positive sentiment of the geopolitical situation in the Middle East and Ukraine is offset by the expectation of oversupply in 2025, when the average price of Brent crude oil may fall to US$65 per barrel.

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
20241129—1205	Daqing Pec	Normal
20241129—1205	Daqing Ref & Che	Normal
20241129—1205	Dalian Pec	Suspended
20241129—1205	Fushun Pec	Normal
20241129—1205	Lanzhou Pec	Normal
20241129—1205	Jingmen Pec	Normal
20241129—1205	Gaoqiao Pec	Normal
20241129—1205	Maoming Pec	Suspended
20241129—1205	Jinan Ref & Che	Normal
20241129—1205	Nanyang Pec	Normal
20241129—1205	Panjing Beiran	Normal

 

3. Stock

The paraffin market was sluggish this week. Although it was the beginning of the month, traders were concerned about downside risks and were cautious in purchasing. Currently, the national inventory is about 18,000 tons.

4. Market demand

The paraffin market was average this week, mainly driven by customers with routine needs in the downstream industry.

5. Industry analysis overview

This week, paraffin prices were raised again. PetroChina and Sinopec raised prices of some types by 50 yuan/ton on Monday and Tuesday, especially semi-refined types. However, the profit margins of dealers were further compressed, and some dealers even sold their stocks at the listed price.

6. Price expectations

The current price of paraffin is relatively high, and the international oil price is clearly on a downward trend, which will most likely cause the price of paraffin to remain flat for a period of time and then start to fall within this month.