Recently, pyrolysis C5 fraction prices took a dive in a few regions of China, and demand for C5 petroleum resins used in road marking paint weakened, both domestically and internationally, easing the shortage situation.
I. Market Overview
Prices of C5 petroleum resins for road marking paint moved sideways this week. Transaction volume continued to drop because of weak downstream demand, and pyrolysis C5 fraction prices fell to Yuan 5,900–6,150/tonne, intensifying gloomy sentiment. But the consumption tax has been placed on C5 petroleum resin producers, pushing up their costs, and few Sinopec and PetroChina enterprises lowered their offers for pyrolysis C5 fraction. Furthermore, spot C5 petroleum resins were in tight supply. Under such circumstances, the market ended in a stalemate.
II. Supply and Demand
2023-2024 China Weekly Production of C5 Petroleum Resins for Road Marking Paint
Source: OilChem
Supply: The production of C5 petroleum resins for road marking paint shrank to 54,000 tonnes, down 8.18% from last week. There was an increase in temporary unit maintenance in May and June. . First, selling PIP turned out to be a more lucrative choice for producers of C5 petroleum resins for road marking paint. Second, it is anticipated that during the off-season, C5 petroleum resin transitions will decrease. Additionally, producers of C5 petroleum resins reduced their production as a result of a slowing in the decline in pyrolysis C5 fraction prices.
Demand: Construction volume did not meet expectations, partly because of the adverse effects of recent severe rains in South China and financial difficulties faced by contractors.
2023-2024 China Weekly Inventory of C5 Petroleum Resins for Road Marking Paint
Source: OilChem
III. Summary and Outlook
Spot resin availability is now limited since C5 petroleum resin producers are unwilling to reduce their offers and have lost interest in producing owing to rising tax expenses and a slowdown in the price decline of pyrolysis C5 fraction. But downstream users are incapable of accepting high prices, and there is a seasonal decline in transaction volume and an overall drop in pyrolysis C5 fraction costs.
Taken all together, negotiated prices of C5 petroleum resins for road marking paint may inch down.
Written by Todd Zhu, todd@oilchem.net
Edited by Navy Liu, liuchuanjun@mysteel.com
