Preface: Before the holiday, international crude oil prices rallied strongly, providing a supportive atmosphere for the commodity market. Downstream customers' stockpiling enthusiasm before the holiday was acceptable. Coupled with the opening of the Shandong-East China arbitrage window, trading in the Shandong market was active in the week before the holiday, with an average sales-to-production ratio of 116%. Refineries shipped smoothly and destocked successfully, entering the pre-holiday inventory reduction phase. However, due to the approaching holiday, restrictions on logistics and transportation, and the widening fluctuation range of crude oil, the market's enthusiasm for chasing gains subsided.

Comparison of International Crude Oil Prices During the May Day Holiday

Table 1: Comparison of International Crude Oil and Related Product USD Prices (USD/barrel)

| Product | April 29 | May 4 | Change |
| :--- | :--- | :--- | :--- |
| WTI | 106.88 | 106.42 | -0.46 |
| Brent | 118.03 | 114.44 | -3.59 |

Source: chempricehub Information

The geopolitical conflict in the Middle East continued to influence international oil prices. During the holiday period, oil prices fluctuated significantly, mainly affected by factors such as the US-Iran negotiations and navigation through the Strait of Hormuz.

Table 2: Comparison of International Aromatics Product Prices (USD/ton)

| Product Name | Price Type | April 29 | May 4 | Change |
| :--- | :--- | :--- | :--- | :--- |
| Naphtha | CF Japan | 1044.25 | 1027.25 | -17 |
| Toluene | FOB Korea | 1034 | 1081 | 47 |
| Xylene | FOB Korea | 1078 | 1087 | 9 |
| Benzene | FOB Korea | 1119 | 1119 | 0 |
| PX | CFR China | 1267.33 | 1264 | -3.33 |
| SM | FOB Korea | 1355 | 1332 | -23 |
| MTBE | FOB Singapore | 1054.99 | 1057.18 | 2.19 |

Source: chempricehub Information

During the holiday, the Chinese market was closed, and there were only two trading days for USD-denominated products. With international markets experiencing wide fluctuations, industry participants were cautious, and their willingness to trade was limited. International aromatics product prices moved in tandem with oil price fluctuations.

In other news, South Korea's toluene imports in April were 45,000 tons, while exports were less than 30,000 tons. Mixed xylene imports were 19,000 tons, with exports of 45,000 tons. The only aromatics product available for arbitrage between Asia and the US was benzene; South Korea's benzene exports to the US amounted to 18,000 tons.

II. Comparison of Shandong Toluene and Related Product Prices During the May Day Holiday

Table 3: Comparison of Shandong Gasoline & Aromatics Product Prices (RMB/ton)

| Product Name | April 30 | May 5 | Change |
| :--- | :--- | :--- | :--- |
| 92# Gasoline | 8016 | 7981 | -35 |
| Toluene | 6925 | 6800 | -125 |
| Xylene | 7020 | 6915 | -105 |
| Mixed Aromatics | 6200 | 6100 | -100 |
| Trimethylbenzene | 6120 | 6200 | 80 |
| MTBE | 6480 | 6450 | -30 |
| Alkylate | 8600 | 8600 | 0 |

Source: chempricehub Information

During the holiday period, the gasoline and feedstock markets in the Shandong region first weakened and then strengthened. The rise in crude oil futures prices during the holiday stimulated trading activity. Overall, gasoline market transactions remained weak, with no significant increase in terminal demand, compounded by restricted transportation of hazardous chemical vehicles during the holiday. Transactions were relatively sluggish in the first three days of the holiday. Later, supported by the approaching end of the holiday and covering of short positions taken before the holiday, prices rebounded slightly.

Table 4: Comparison of Shandong Refinery Toluene Product Prices (RMB/ton)

| Company Name | April 30 | May 5 | Change |
| :--- | :--- | :--- | :--- |
| Dongfang Hualong | 6850 | 6850 | 0 |
| Qicheng Petrochemical | 6300 | 6250 | -50 |
| Zhenghe Petrochemical | 6870 | 6800 | -70 |
| Youtai Technology | - | - | - |
| Wudi Xinyue | 6903 | 6783 | -120 |
| Dongming Petrochemical | 7150 | 7050 | -100 |
| Yatong Petrochemical | 6900 | 6750 | -150 |
| Dongying Qirun | 6900 | 6750 | -150 |
| Huaxing Petrochemical | 6900 | 6750 | -150 |
| Jingbo Petrochemical | 7150 | - | - |
| Yulong Petrochemical | 7100 | 7100 | 0 |

Source: chempricehub Information

In the early part of the holiday, xylene trading in the Shandong region was sluggish. Cumulative transactions from May 1 to May 3 were only around 600 tons, with a production-to-sales ratio below 10%. Following a sharp rise in crude oil futures on Monday and continued geopolitical stimulus, trading activity picked up significantly. Combined with some covering of short positions placed before the holiday, xylene transaction volume from May 4 to 5 reached nearly 10,000 tons, with an average sales-to-production ratio of about 64%.

III. Post-Holiday Forecast

During the holiday period, the Shandong xylene market first weakened and then strengthened. Refinery prices edged down slightly compared to pre-holiday levels. Although there was a small premium of 50-100 RMB/ton in spot transactions on the last day of the holiday, overall restocking demand in the market was limited. In May, the news of the gradual liberalization of refined oil product exports continues to have some impact on the market. However, under the pressure of high domestic gasoline inventory levels overall, the previously rumored export volumes are insufficient to significantly alter the high inventory pattern of domestic gasoline. The gasoline market remains under pressure to operate. Major refineries' strategy of "reducing oil output to increase chemical production" has led to an increase in scheduled xylene production volumes for May, adding to market selling pressure. On the demand side, there has been no noticeable improvement in the short term. Market attention is focused on when gasoline exports will be liberalized. There is potential for post-holiday restocking in the short term, but the duration is expected to be brief. The xylene market is expected to fluctuate with a weakening bias after the holiday.