Lead: Geopolitical conflicts continue to disrupt international crude oil markets, coupled with domestic refinery maintenance and increased internal consumption tightening supply-demand dynamics. These multiple positive factors are driving mixed C5 prices upward. As of July 23, the average price of mixed C5 in the Shandong market reached 7,055 yuan/ton, up 515 yuan/ton or 7.87% from 6,540 yuan/ton a week earlier.
The mixed C5 market experienced a significant price surge. During the week, escalating US-Iran conflicts boosted international crude oil prices considerably under geopolitical tensions. Shandong refineries successively raised their refined oil product quotations. Crude oil and gasoline provided strong dual fundamental support, supplemented by tight spot supply of mixed C5, strengthening refineries' willingness to push prices higher. Traders and downstream factories actively entered the market, with some engaging in buying at higher levels. Market trading sentiment was active throughout the week. Affected by changes in the statistical sample size for the East China market, the regional price increase widened.
International crude oil prices rose significantly due to intensified US-Iran conflicts. Under cost pressure, the price increases transmitted downstream to refineries, raising valuations for various light hydrocarbon feedstocks. On the other hand, the largest downstream consumption sector for mixed C5 is gasoline production. The favorable domestic gasoline market outlook boosted procurement enthusiasm among social producers, directly driving demand for mixed C5.
Table 1: Comparison of Upstream and Downstream Market Trends for Mixed C5
| Product | Region | Current Period Average | Previous Period Average | Change | Change Rate | Unit |
|---|---|---|---|---|---|---|
| International Crude Oil Futures | WTI | 83.28 | 76.11 | 7.17 | 9.42% | USD/barrel |
| Brent | 89.33 | 81.06 | 8.27 | 10.20% | USD/barrel | |
| Mixed C5 | Shandong | 6827 | 6286 | 541 | 8.61% | yuan/ton |
| East China | 6547 | 5668 | 879 | 15.51% | yuan/ton | |
| Gasoline (92#) | Dongying | 8405 | 7811 | 594 | 7.60% | yuan/ton |
Data source: Chempricehub Information
Since late June, mixed C5 refineries including Weilian Chemical, Wudi Xinyue, and Weifang Hongrun have shut down their reforming units for maintenance, and a plant in Northeast China has implemented rotating maintenance. In July, the market volume of mixed C5 is approximately 172,200 tons, a decrease of 156,200 tons or 47.56% month-on-month. Supported by the fundamental supply-demand balance of mixed C5, refineries have strong intentions to raise prices. Additionally, widespread reluctance to sell among traders fosters a strong market sentiment to support prices, further expanding the upside potential for mixed C5.
Table 2: Changes in Mixed C5 Market Volume
| Product Name | June | July (Estimate) | Change | Change Rate | Impact Duration | Maintenance Reason |
|---|---|---|---|---|---|---|
| Mixed C5 Market Volume | 32.84 | 17.22 | -15.62 | -47.56% | ~45 days | Planned |
Data source: Chempricehub Information
Crude Oil: International oil prices are expected to have room to rise next week. The core logic is: continued US-Iran standoff, combined with renewed conflict between the Houthis and Saudi Arabia, increases supply risks for Middle Eastern crude oil, supporting prices via geopolitical premium. However, statements from the US side indicating that Iran is willing to negotiate and that oil prices will fall sharply will cap the upside potential for oil prices.
Demand: The expected wholesale and retail price caps for refined oil products this round are set to rise significantly. Therefore, the news flow continues to be positive for the regional oil market. The refined oil market in Shandong is expected to remain firm. With high feedstock prices supporting refineries' ability to hold prices, midstream and downstream players will adjust inventory levels and procure on demand. Market transactions are likely to be mainly small-lot orders from individual buyers. Shandong independent refinery gasoline prices are expected to fluctuate with a slight upward trend next week, while diesel prices are expected to rise first and then decline.
Mixed C5: International oil prices have room to rise. The gasoline market is expected to fluctuate with a slight upward trend. The tight supply-demand fundamentals for domestic mixed C5 are expected to persist until mid-August. Additionally, recent shipment orders have seen decent volumes, and market rigid demand remains stable. Therefore, the mixed C5 market is expected to maintain a strong and fluctuating trend next week.
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