Introduction: As of April 23, the weekly average price of Mixed C5 in Shandong was 4,760 RMB/ton, down 1,136 RMB/ton or 19.27% from the previous week. In East China, the weekly average price stood at 5,222 RMB/ton, a drop of 778 RMB/ton or 12.97% from the previous week.

I. Continuous Correction in the Mixed C5 Market in April

Domestic spot prices of Mixed C5 in Shandong have experienced a significant decline. Due to clear inventory pressure at Mixed C5 refineries, coupled with rising temperatures leading to an off-season for downstream consumption, the decline in Mixed C5 prices has broadened. Poor downstream purchasing sentiment, with traders and downstream plants only making small-lot purchases at low prices, has resulted in a sluggish market atmosphere.

As of April 23, the price of Mixed C5 in the Shandong market was 4,540 RMB/ton, down 2,100 RMB/ton or 31.63% from 6,640 RMB/ton on April 9. The average price in the East China market was 4,600 RMB/ton, dropping by 2,020 RMB/ton or 30.51% from April 9.

Table 1: Domestic Mixed C5 Price Comparison (RMB/ton)

| Market | April 23 | April 9 | Change | % Change | April Avg (as of Apr 16) | Unit |
|---|---|---|---|---|---|---|
| Shandong | 4540 | 6640 | -2100 | -31.63% | 5918 | RMB/ton |
| East China | 4600 | 6620 | -2020 | -30.51% | 6099 | RMB/ton |

Source: chempricehub Information

II. Continuous Decline in the Gasoline Market – The Core Driver of Mixed C5 Price Drop

Recently, the refined oil product market at independent Shandong refineries has been in a persistent downtrend (92# gasoline at 7,738 RMB/ton, down 458 RMB/ton MoM or -5.59%, but up 36 RMB/ton YoY or +0.47%; 0# diesel at 7,056 RMB/ton, down 318 RMB/ton MoM or -4.31%, up 590 RMB/ton YoY or +9.12%). Amid volatile international crude oil futures, the weak trend in the Shandong refined oil market remains difficult to change. Refineries in the region are cutting prices to reduce inventory pressure, but limited end-user consumption, slow inventory digestion at social storage, minimal fixed-price purchasing by intermediate traders, and low inventory buying/selling by downstream users have led to a depressed market transaction atmosphere.

III. Similar Decline in Homogeneous Product – High-Olefin C5

Spot prices in the Northwest high-olefin C5 market have fallen sharply, with the price range fluctuating between 5,925 and 6,750 RMB/ton. As of April 23, the Northwest high-olefin C5 market price was 5,925 RMB/ton, down 1,908 RMB/ton or 24.36% from 7,833 RMB/ton on April 9. Forced by weak end-market demand and the onset of the off-season consumption pattern for high-olefin C5 due to rising temperatures, combined with significant inventory pressure at various refineries, Northwest high-olefin C5 prices had to drop significantly to stimulate sales. Traders and downstream plants had limited new orders, only purchasing small lots at low prices. By the weekend, as profit margins became attractive, some market participants engaged in bottom-fishing, leading to an improvement in the sales atmosphere.

IV. Unchanged Short-Term Market Logic; Wide Fluctuations Become the Norm

Crude Oil: International oil prices are expected to have room for upward movement next week, with WTI potentially trading in the $86-96/barrel range and Brent in the $95-105/barrel range. The core logic supporting this price trend is that US-Iran negotiations have not yet resumed, Red Sea shipping remains disrupted, and supply-side risks continue to ferment, providing support for oil prices.

Demand: The gasoline and diesel market is expected to continue its decline next period. High oil prices continue to suppress gasoline and diesel demand. However, the recent widening of the wholesale-retail price spread for gasoline and diesel has sparked "price wars" among gas stations to capture market share. Meanwhile, the upcoming May Day holiday travel period is expected to boost gasoline demand. Refineries are experiencing losses in diesel production, leaving limited room for further price cuts. However, given the current relatively high domestic supply and inventories, both state-owned and local refineries still have the intention to sell. Therefore, the decline in domestic gasoline and diesel prices is expected to slow down next week, with a possibility of a slight rebound after the drop.

Mixed C5: Mixed C5 prices have fallen to a periodic low, increasing the operational space, and some market participants have entered the market to buy the bottom. However, refineries are still facing pressure to reduce inventories before the holiday next week. The domestic light C5 components market is expected to fluctuate weakly with a narrowed decline next week.