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Newsletter summary

Recently, the average ex-factory price of domestic refined naphtha has fallen, and the terminal demand in the market is weak. Crude oil inventories increased more than expected, demand expectations weakened, and the supply of international oil prices dissipated. Downstream toluene and mixed xylene market market high consolidation, the supply side is expected to decline. The price of naphtha is higher than that in the previous period, and the market may be dominated by high-level arrangement.

Text of news flash

* the market for refined naphtha in the mainland has declined * * according to the latest data from the commodity analysis system, the domestic market for refined naphtha has recently shown a high decline. As of April 24, the average factory price of domestic georefining hydronaphtha was 8486.Phlbosscom.50 yuan / ton, down from 8554.00 yuan / ton on April 15Phlbosscom0.79%. The actual transaction price of hydronaphtha hovered around 8400-8600 yuan / ton. At the same time, the average ex-factory price of straight-distilled naphtha fell to 8429.00 yuan / ton, down 0.59% from 8479.00 yuan / ton on April 15, with the actual transaction price in the range of 8400-8500 yuan / ton. Terminal demand in the naphtha market was weak, gasoline and diesel prices fell at a high level, and refinery prices fell accordingly. In the upstream crude oil market, the market has experienced fluctuations after falling first and then rising. The higher-than-expected increase in US crude oil inventories, the weakening of demand expectations, and the stabilization of conflict risk premium are the main factors of crude oil market volatility. The reduction in the risk of conflict in the Middle East and market expectations of an escalation of US oil export sanctions against Iran have led to a moderation of the risk premium for crude oil. The signal from the Fed added to fears that the interest rate cut cycle could be delayed. In addition, the US Energy Information Administration (EIA) reported a sharp increase in US crude oil inventories last week, further affecting oil prices. In the downstream market, the toluene market is in a high finishing state, and the demand for downstream oil regulation and disproportionation reaction is not up to expectations. The maintenance plan of the toluene plant is expected to relieve the pressure on the supply side of toluene to some extent. The mixed xylene market also showed high finishing, the operating rate of downstream PX and mixing industry decreased slightly, the operating rate of phthalic anhydride industry remained low, and the overall support of the demand side of mixed toluene was weak. A number of domestic plants are scheduled for later maintenance, which is expected to lead to a reduction in the supply of mixed xylene. The operating rate of p-xylene is declining, and the price is high. PX units such as Urumqi Petrochemical, Hengli Petrochemical (600346) and Ningbo Zhongjin are about to be overhauled, and the domestic PX operating rate is expected to decline significantly. From the technical level, from December 31, 2023, the 7-day average of naphtha goes through the 30-day average, starting the upward trend. At present, the two moving averages maintain the same upward trend. As of April 21, 2024, the probability of a change in naphtha performance in the next 7 days is expected to be 36.23%. At present, the price of naphtha is at an one-year high, two-year high and three-year high. According to the commodity analysis system, the average price of naphtha in the past three years is 7855.39 yuan / ton, the median value is 8161.63 yuan / ton, the minimum value is 6467.50 yuan / ton, and the maximum value is 9855.75 yuan / ton. Looking to the future, the high decline of the international crude oil market may increase the wait-and-see mood of the domestic naphtha market. At present, the trading of geo-refining naphtha terminals is limited, and the market trading is focused on the gap of geo-refining reforming. With the May Day short holiday approaching, although middlemen are not active in purchasing, and gasoline prices are on the high side, the gasoline market may decline slightly this week. As for diesel, the operating rate of outdoor projects and logistics and transportation remain stable, and the demand for diesel is expected to change little. To sum up, it is expected that the near future naphtha refining market will be dominated by high-level consolidation.