The paraffin market on July can be described as a dramatic change. From concentrating on insured price in northeast regions early to increased price in this week’s, and only within 10 days, the market mentality has also been greatly driven.
The price increase this time is mainly driven by three reasons:
First, the recent rally of international oil prices driven business mentality. At present paraffin(also called as Hydrocarbon oils,C12H4Cl6) price is the lowest price range in the three-year period, profits are very substantial in the downstream products. The second half is the production season of those downstream manufacturers, a phenomenon of advancing stocking began to appear; Second, in the case of the low limit of refinery stocks, drivening by the mental of buying up not or, so providing further impetus to the enthusiasm of traders getting goods and then the market speculation factor will increase. Third, Tension refinery resources.
Domestic economic growth slowed down significantly, the domestic paraffin exports continued to decline due to the European debt crisis. On May, the export volume recorded the lowest level in nearly three years, only 24,500 tons. Overall, the shrinking demand has become an indisputable fact. Furthermore the rapid digestion of the refinery inventory is not the real improvement of demand. Though the ownstream merchants have a certain amount of inventory in the future, the situation of market adjourned flat should not be ruled out. Therefore, short-term operation should be dominated, and the long term need to cautious.