【Lead】 In May, downstream demand decreased significantly, and foreign demand was mostly waiting to see price trends. C5 petroleum resin producers faced increasing shipment pressure, leading to price declines.

1. Rapid Price Declines in Cracking C5 and Isoprene

By this week, cracking C5 prices were quoted at 5,650 yuan/ton in North China, 5,600 yuan/ton in East China, 5,300–5,900 yuan/ton in Northeast China, and 5,450–5,600 yuan/ton in South China. Some private-sector prices fell to 5,300–5,600 yuan/ton, with a cumulative drop of 2,000 yuan/ton. Domestic isoprene prices fell to 7,500–8,900 yuan/ton, down nearly 10,000 yuan/ton from the peak.

2. Significant Decline in Downstream Demand for C5 Petroleum Resin and Difficulty in Cost Pass-Through

Prices of raw materials petroleum resin and SIS rose sharply. Downstream hot-melt adhesives passed on costs relatively quickly, with cumulative increases reportedly ranging from 50% to 100% of the raw material price rise from March 7 to April 3. Adhesive prices increased by 50–70%, but in May, as end-user orders fell noticeably, prices corrected slightly by about 10%. In the hot-melt coatings sector, overall price increases ranged around 17% during March–April. Although producers continued to push prices up by 200 yuan/ton in May, end-user purchasing volumes dropped significantly, making it difficult to pass on cost increases. Due to the difficulty of cost pass-through in the downstream coatings sector and the price correction in the hot-melt adhesives sector, transaction volumes fell markedly. Rosin resin prices also saw a notable correction, dropping more than 12%.

Summary

Overall, raw material cracking C5 and isoprene prices have largely stabilized. Recently, downstream buyers have been making just-in-time purchases at low prices to meet essential demand. Deep-processing downstream sectors have maintained relatively high procurement volumes of raw materials. Some plants have slightly reduced operating rates, and some are expected to shut down in the future, easing sales pressure. C5 petroleum resin costs are expected to find a floor in the near term.

After the holiday, supply of C5 and isoprene is expected to be low, and prices will remain stable. The operating rate of C5 petroleum resin plants has fallen continuously to 60.82% and may decline further to around 50% by June. With reduced supply from C5 petroleum resin producers and the likelihood of phased replenishment from downstream, end-users, and foreign demand, producers will be less inclined to offer discounts. Negotiated prices are expected to gradually stabilize, with limited downside potential.