SunSirs: China Local Refining Naphtha Market first suppressed and then rose in July

According to the commodity analysis system of SunSirs, as of July 31, the average ex factory price of domestic locally produced hydrogenated Naphtha was 8,066.50 RMB/ton, up 4.37% from 7,729.00 RMB/ton at the beginning of this month, while locally produced hydrogenated Naphtha fell first and then rose, down at the end of this month.

As of July 31, the average ex factory price of domestic straight run Naphtha mainstream was 7,881.50 RMB/ton, up 3.55% from 7,611.50 RMB/ton at the beginning of this month. Local straight run Naphtha fell first, then rose, and declined at the end of this month.

On July 31, the Naphtha commodity index was 99.56, 0.8 points lower than yesterday, 18.15% lower than the cycle's highest point of 121.64 (2022-03-10), and 135.70% higher than the lowest point of 42.24 on July 19, 2016. (Note: The cycle refers to the period from September 1st, 2012 to the present)

Product: In July, the price of locally refined Naphtha fell first and then rose, and fell at the end of the month. At present, the mainstream price of locally refined hydrogenated Naphtha is about 8,000-8,200 RMB/ton, and the mainstream price of straight run Naphtha is about 7,900 RMB/ton. In the first ten days of July, the tax policy was released, the restructuring related products fell back, and the Naphtha market declined; In mid to late July, supported by terminal restructuring, refineries actively boosted prices and achieved good transactions; At the end of July, the profit of terminal restructuring declined, and the Naphtha market showed a downward trend. As of the week ending July 26th, Singapore's medium distillate oil inventory decreased by 632,000 barrels to a nearly five month low of 7.211 million barrels. Singapore's light distillate oil inventory increased by 1.34 million barrels, and Singapore's fuel oil inventory increased by 3.116 million barrels.

Upstream: The international crude oil market fluctuated and rose in July. On the one hand, the expectation of supply tightening continued to ferment. Saudi Arabia and Russia announced new production reduction measures. In addition, the US Shale oil production has been in a bottleneck. The tightening of crude oil supply has become a major positive for the international oil market. On the other hand, there is significant support during the peak summer oil consumption season, with North America experiencing a peak in summer oil consumption. In addition, with increasing demand from China, international oil market prices continue to rise. Finally, the Federal Reserve's interest rate hike is nearing its end. Multiple positive factors support the sustained rise of international oil prices.

Downstream: In early July, the international crude oil price rose and the downstream product oil consumption tax policy was introduced, driving up the price of toluene; In the later stage, on the one hand, international crude oil prices continued to rise, and on the other hand, domestic supply of PetroChina South China and CNOOC Huizhou decreased, once again driving the toluene market up significantly. The price of mixed xylene continued to rise significantly in July. Due to the impact of early equipment maintenance, the inventory of mixed xylene has been at a low level. Although some equipment has recently restarted, the supply of mixed xylene is still relatively tight, providing support for the mixed xylene market. In July, the supply of P-Xylene was relatively normal, and the domestic PX operating rate was more than 70%. However, in the maintenance of some P-Xylene devices, the spot supply did not change much, and the PX price trend rose.

SunSirs energy analysts believe that the price of locally refined Naphtha continues to rise in the near future, and the price is high. The downstream has a strong wait-and-see mood, and the purchasing enthusiasm has declined. In addition, the profit of terminal restructuring has declined, so there is no obvious benefit in ethylene. It is expected that the market of locally refined Naphtha will decline in the near future.

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