Feedstock C5 and piperylene prices rose sharply. Downstream adhesives and hot-melt coatings increased their rigid demand for C5 petroleum resin, pushing prices higher repeatedly.
During the week, cracked C5 in North China rose by RMB400 to RMB7,100/t; East China rose by RMB350 to RMB7,000/t; Northeast China was quoted at RMB6,750–7,060/t; South China rose by RMB350 to RMB6,900–7,000/t; some private enterprises raised prices to RMB7,500–8,258/t. Piperylene prices at both the low and high ends rose by RMB300/t, with ex-works prices at RMB8,500–9,300/t.
Table 1: C5 Petroleum Resin Plant Status
| Company Name | Capacity | Maintenance Start Date | Maintenance End Date | Remarks |
|---|---|---|---|---|
| Puyang Bandelu | 2.5 | September 5 | September 20 | Seasonal maintenance |
| Daqing Huake | 2.5 | August 25 | September 23 | Temporary maintenance |
| Zhejiang Derong | 3.5 | August 3 | September 15 | Routine maintenance |
| Henan Zhongtai | 2 | June 30 | September 15 | Temporary maintenance |
Cracked C5 output rose from last week. In the current period, output was 73,800 t, an increase of 1,300 t from last week, or 1.79% week on week, with capacity utilization at 72.54%. During the week, C5 petroleum resin supply was 8,100 t, and the operating rate was 62.58%, below the year-to-date average. The sharp rise in feedstock cracked C5 prices and the continued loss of northern market share to non-deep-processing applications led to negative resin margins and insufficient supply; therefore, operating rates continued to fall. In addition, units restarted after earlier maintenance are mostly expected to ship in late September.
In terms of inventory levels, first, there were many plant maintenance shutdowns, keeping C5 petroleum resin output at a low level; second, downstream demand rose, and producer inventories were mostly below safe levels. Market inventories continued to decline and are basically at their lowest level in nearly two years.
Table 2: C5 Petroleum Resin Production-Sales Balance Sheet
| Data Type | Metric | Current Period | Previous Period | Change | Next Period Trend |
|---|---|---|---|---|---|
| Road Marking Paint C5 Petroleum Resin | Production | 3 | 4.2 | -1.2 | ↓ |
| Inventory | 7.3 | 9.6 | -2.3 | ↓ | |
| Consumption | 5.3 | 7.4 | -2.1 | ↓ | |
| Adhesive C5 Petroleum Resin | Production | 5.1 | 4 | 1.1 | ↑ |
| Inventory | 11.1 | 11.7 | -0.6 | ↓ | |
| Total Demand | 5.7 | 4.2 | 1.5 | ↑ |
In terms of consumption, for hot-melt coatings, continued declines in producer supply led to inventory drawdowns, forcing consumption lower. For hot-melt adhesives, there is still a risk of oil shortage in October; end-user risk aversion has risen, with intentions to build safety stocks. Market trading volume increased, and overall destocking continued. Most inventories are below safe levels, while consumption levels have moved higher.
Overall, in the second half of September, domestic cracked C5 remained tight, driving prices higher, which in turn pushed up piperylene prices. C5 petroleum resin faces strong cost pressure, with negative margins in some regions. At the same time, downstream rigid demand is rising, and stocking demand driven by risk aversion is increasing. Meanwhile, crude oil has risen to highs, and cracked C5 and piperylene prices are also relatively high; some bearish sentiment exists in the market. However, in the short term, feedstock supply remains tight, so even if prices correct, the decline is unlikely to match that of April–May.
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