SunSirs: China Local Refining Naphtha Market fluctuated and rose in August

According to the Commodity Analysis System of SunSirs, as of August 31, the mainstream factory price of domestic refined and hydrogenated naphtha was 8,119.00 RMB/ton, an increase of 0.96% compared to 8,041.50 RMB/ton at the beginning of this month. The market of refined and hydrogenated naphtha has fluctuated and risen.

As of August 31, the mainstream factory average price of domestic refined straight-run naphtha was 7,946.50 RMB/ton, an increase of 0.60% compared to 7,899.00 RMB/ton at the beginning of this month. The market for locally refined straight-run naphtha fluctuated and rose.

On August 31, the naphtha commodity index was 100.20, unchanged from yesterday, a decrease of 17.63% from the cycle's highest point of 121.64 points (2022-03-10), and an increase of 137.22% from the lowest point of 42.24 points on July 19, 2016. (Note: The cycle refers to the period from September 1st, 2012 to the present)

Product: In August, the price of refined naphtha fluctuated and increased. Currently, the mainstream price of refined and hydrogenated naphtha is around 8,100-8,200 RMB/ton, while the mainstream price of straight run naphtha is around 7,800-8,000 RMB/ton. In the first half of August, there was no significant substantial improvement in terminal performance. Refineries were actively shipping, while merchants were cautious in pursuing higher prices. There was a strong wait-and-see sentiment, and transactions were mainly on demand; In the second half of August, a small amount of demand was released in the direction of refining and reforming ethylene, and refineries were actively shipping. However, the flat trend of gasoline and diesel suppressed the naphtha market, and the market operation was cautious, with demand being the main transaction. As of the week ending August 30th, Singapore's light distillate inventory increased by 162,000 barrels, reaching its highest level in three weeks, reaching 12.928 million barrels. Singapore's medium distillate inventory decreased by 646,000 barrels to 7.989 million barrels, reaching a two-week low. Singapore's fuel oil depot experienced a decrease of 2.184 million barrels in the current week, reaching a 6-week low of 19.915 million barrels.

Upstream: In August, crude oil emerged from a trend of rising and falling. In the first half of the year, the market continued to rise due to supply concerns and the positive trend during the peak oil consumption season. Brent crude oil topped $87 per barrel, while WTI crude oil approached $83, reaching a nearly 9-month high. Afterwards, with the deterioration of macro data, the market turned sharply downwards, and near the end of the month, the WTI fell below $80. Under the combined effect of OPEC+ production control and weak economic data in oil producing countries, the supply-demand game intensifies, and the market shifts into a narrow range of fluctuations.

Downstream: In August, the toluene preliminary maintenance equipment was restarted, and the domestic disproportionation equipment started to decline. In addition, the consumption tax on mixed aromatics further separated the mixed aromatics of multiple enterprises, resulting in an increase in toluene supply. However, due to the increase in gasoline consumption in the United States, the price difference of toluene between the United States and Asia has further expanded, stimulating domestic exports and offsetting the pressure brought by the increase in domestic supply. The price of toluene continues to operate at a high level. The supply of mixed xylene continues to remain tight, providing support for the mixed xylene market. The downstream market has not changed much, and the overall demand for PX is good. Merchants have a strong willingness to stand up for prices, and the PX market price is strong in the short term.

Energy analysts from SunSirs believe that the current slight increase in international crude oil has resulted in weak guidance for the local refined naphtha market; At present, the local refining naphtha market has sufficient supply, with a small amount of ethylene cracking in the terminal direction that needs to be released. Refineries are actively shipping, but the terminal benefits are limited, and market operations are cautious. It is expected that the local refining naphtha market will be mainly consolidated in the near future.

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