As of August 7, the mainstream ex-factory average price of domestic refining and hydrotreating naphtha was 4,700 RMB/ ton, which was 2.45% higher than 4,580 RMB/ ton at the beginning of the week. The actual transaction price of hydrotreated naphtha was about 4,600-4,700 RMB/ ton. Naphtha prices of local refineries rose alternately last week, with an increase of 100-200 RMB/ ton. Manufacturers reported that the inventory pressure was generally reduced compared with the previous month, and the superimposed downstream demand slightly recovered, and naphtha prices rebounded.
The naphtha commodity index on August 7 was 58.10, flat with the previous day, down 43.38% from the cycle's highest point of 102.62 (2012-09-24), and 37.55% higher than the lowest point of 42.24 on July 19, 2016. (Note: period refers to 2012-09-01 to now)
Analysis of Influencing Factors
Last week, naphtha prices rose intensively and inventory pressure eased.
Upstream: according to the monitoring of SunSirs, the international crude oil market fluctuated above $40/ barrel, and the oil price reached its peak since March. The market's positive and negative effects offset each other, and the market sentiment fell into anxiety. On one hand, the economy is still in a slow recovery period, and the European and American economic stimulus plans are coming out soon. Compensatory production reduction in some OPEC+ member countries is good, and the market supply has not yet made substantive action to relax production reduction. On the other hand, the epidemic situation in overseas countries is still more severe, and the number of new cases continues to soar, which makes the worry about crude oil demand rise obviously, and the oil price falls into a bottleneck period.
Downstream: according to SunSirs data, the domestic toluene market continued to rebound slightly last week. As of Friday, the domestic average price was about 3,380 RMB/ ton, up 0.6% from the previous week. The domestic xylene market rose slightly last week. As of Friday, the domestic average price was about 3,550 RMB/ ton, up 1.14% from the previous week. Domestic inventory pressure has been significantly reduced, and the risk of oversupply has been greatly reduced.
Energy analysts of SunSirs believe that the naphtha refining industry went up last week, the inventory pressure of manufacturers was relieved, and the downstream procurement was fair. It is expected that the price of locally refined and hydrotreated naphtha will temporarily stabilize in the near future. The average price range may be 4,550-4,750 RMB/ ton.
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