Introduction: Domestic rosin prices have continued to show a slight downward correction recently. Combined with small-lot procurement in the terminal pressure-sensitive adhesive market, the rosin resin market is exhibiting weakness.

Rosin prices extended their modest decline during the week. On one hand, new supply from Masson pine rosin gradually entered the market, and some inventory holders became more willing to sell. On the other hand, orders for rosin resin were scarce, with downstream adhesive producers primarily consuming existing stocks. Overseas demand also remained weak, leading to reduced rosin consumption. While some local suppliers became more eager to sell, speculative activities around the bottom price intensified, alongside increased bulk purchasing volume. As a result, prices stabilized after the decline.

Operating rates at rosin resin manufacturers have dropped significantly, attributable to scarce downstream orders, continuously declining petroleum resin prices, and rosin prices stabilizing after easing. The market is dominated by bearish factors, with negotiated prices steadily edging lower.

In the petroleum resin sector, mainstream prices for adhesive-grade C5 petroleum resin fell by RMB 500/ton to the range of RMB 11,000-13,500/ton. Transaction prices for decyclized C5 petroleum resin also dropped by RMB 500/ton to RMB 9,000-10,500/ton. Meanwhile, hydrogenated petroleum resin prices declined to RMB 13,500-15,000/ton. Terminal demand remains limited to small-lot just-in-time procurement, and the petroleum resin market has entered a phase of inventory accumulation. The overall oversupply situation in the chemical sector persists.

Comparing rosin resin and petroleum resin prices over the past two years reveals that rosin resin has its own independent price trend due to demand characteristics. However, looking at this year, the turmoil in the Middle East disrupted the supply-demand balance. Demand led to order lock-ins driven by market sentiment. As sentiment faded and actual demand decreased, upstream chemical producers generally reduced operating rates based on downstream requirements. The market is still searching for an equilibrium point. In the short term, excessive demand reduction dominates the overall market, reversing the bargaining power between buyers and sellers.

Overall, processing volumes for domestic chemical products at the source continue to decline slightly. Concurrently, the drop in end-user demand and the ongoing digestion of overbooked orders from March-April have postponed the replenishment cycle. The earlier rapid price increases damaged downstream demand, making the traditional off-season even weaker. Consequently, downstream buyers' expected price levels for raw materials have further lowered.

Therefore, looking within the month, both domestic and international demand is either cautious or has rigidly decreased due to the Middle East turmoil. In the short term, there are no signs of the situation easing, nor room for demand recovery. The reduction in demand dominates the entire industrial chain and will gradually transmit upstream to rosin. The excessive decline in demand will eventually break through rosin industry participants' short-term psychological price floors. Prices may continue to probe lower. Without support from raw materials or demand, and given the overall oversupply in the chemical sector, rosin resin cannot remain immune. Its prices are expected to continue their modest, steady decline.