20241007~20241013 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 soared by $5 compared to the National Day period, and the
average price of Brent crude oil was $78.55 per barrel. It is obvious that the main reason is the sudden escalation of the situation in the Middle East caused by Iran’s retaliation against Israel. However, it is worth noting that on Wednesday this week, the crude oil price fell sharply. Analysts believe that due to the crude oil inventory data released by the U.S. Energy Administration (EIA), people’s concerns about insufficient fundamental demand still outweigh the risks of the situation in the Middle East and Hurricane Milton interrupting crude oil supply. At present, the market is watching Israel’s retaliatory actions. Although no one can accurately predict its actions, this uncertainty has supported the price of crude oil.

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
20241004—1010	Daqing Pec	Normal
20241004—1010	Daqing Ref & Che	Normal
20241004—1010	Dalian Pec	Normal
20241004—1010	Fushun Pec	Normal
20241004—1010	Lanzhou Pec	Suspended
20241004—1010	Jingmen Pec	Normal
20241004—1010	Gaoqiao Pec	Normal
20241004—1010	Maoming Pec	Suspended
20241004—1010	Jinan Ref & Che	Normal
20241004—1010	Nanyang Pec	Normal
20241004—1010	Panjing Beiran	Normal

 

3. Stock

Paraffin inventories increased significantly this week, mainly due to the low shipment volume during the National Day holiday. Currently, the national inventory is about 26,000 tons.

4. Market demand

As most models dropped by 400 yuan/ton on Tuesday this week, all parties were in a wait-and-see mood and demand decreased.

5. Industry analysis overview

This week, semi-refined and crude paraffin wax models dropped by 400-450 yuan/ton, while the price of fully refined paraffin wax remained relatively strong. Even though Jingmen Petrochemical quickly raised the price by 50 yuan/ton after the price reduction, such an operation is rare. At present, the inventory has risen to an annual high, and the main focus in the short term should be on consuming the inventory. In addition, Lanzhou Petrochemical will resume production next week, which may help the supply of
crude paraffin wax models. Therefore, paraffin wax prices are expected to run smoothly, but fully refined models may rise.

6. Price expectations

In October, paraffin wax prices were mainly stable with no expectation of price increases. However, Jingmen Petrochemical currently has a huge cost advantage in fully refined models and there is a possibility of price increases.