Order quantities of C5 petroleum resins for road marking paints varied across regions in the week ending January 16, 2024, and downstream users locked in low-priced resources. In North China, wholesale prices climbed by Yuan 50-100/tonne, and in South China, wholesale prices stopped declining and stabilized.
The main driving force behind such changes was an increase in feedstock costs.
Wholesale Prices of PIP and C5 Petroleum Resins
Source: OilChem
PIP: Sinopec Shanghai Petrochemical raised its offer for PIP significantly by Yuan 700/t.
Pyrolysis C5 Fraction: Pyrolysis C5 fraction costs increased by Yuan 200/t. In addition, Sinopec Qilu Company's unit failure in late December resulted in a tighter supply of C5 fraction, so some C5 petroleum resin producers had to turn to private C5 suppliers and bear higher costs.
In this case, C5 petroleum resin producers were inclined to raise their offers.
As illustrated in the figure below, the inventory of C5 petroleum resins for road marking paints peaked in March 2023 before dropping on significantly increased downstream demand and voluntary production cuts. As factories were free of inventory risks, wholesale prices were slow to dwindle and hovered around Yuan 9,000-9,600/t by the end of 2023, while the prices of premium resources were stated at Yuan 10,000–10,300/t. In the meantime, seasonal factors caused the costs of PIP and pyrolysis C5 fraction to decrease. For manufacturers of C5 petroleum resins, this meant acceptable profits.
Wholesale Prices and Inventory of C5 Petroleum Resins for Road Marking Paints
Source: OilChem
Entering 2024, North China's supply of pyrolysis C5 fraction remained limited, and users began to stockpile C5 petroleum resins ahead of the Spring Festival, causing a short-term tightness of C5 petroleum resin supplies. Therefore, C5 petroleum resin prices either went up or stabilized in different regions.
Written by Todd Zhu, todd@oilchem.net
Edited by Navy Liu, liuchuanjun@mysteel.com
