Morning Market Briefing for the C5 Value Chain

I. Key Points

1. Geopolitical Risks and Crude Oil Prices: The outlook for US-Iran relations remains uncertain, with the possibility of renewed conflict sustaining supply risks and pushing international crude oil prices higher. NYMEX WTI crude futures (December contract) rose by USD 2.40/bbl to USD 90.52/bbl (+2.72% WoW); ICE Brent crude futures (January contract) rose by USD 3.67/bbl to USD 98.29/bbl (+3.88% WoW). In China, INE crude oil futures (contract 2612) fell by CNY 37.8 to CNY 638.4/bbl during the day session but rebounded by CNY 1.40 to CNY 639.8/bbl in the night session.

2. Naphtha Markets: As of the 5th, Japanese naphtha closed at USD 896/ton, while Singapore naphtha settled at USD 96.42/bbl, a decrease of USD 9.51/bbl from the previous trading day.

3. Domestic Cracked C5 and Mixed C5: Yesterday, major domestic cracked C5 producers maintained stable pricing. However, Shandong mixed C5 prices dropped significantly by CNY 240/ton, with an order rate of only 3% and sparse transactions. Following a sharp decline in crude oil prices, there were virtually no transactions for residual liquid across various regions. Market sentiment is heavily weighted towards wait-and-see, leading to a general downturn in bulk products. Regarding deep processing, prices remain acceptable due to balanced supply and demand dynamics. For resin products, downstream procurement is limited to rigid demand, though widespread concern persists among market participants.

4. Cracked C5 Residual Liquid: Prices for cracked C5 residual liquid remained stable yesterday, with minor adjustments in sporadic markets. After gasoline market prices declined yesterday, shipment sentiment weakened. The market price for homogeneous product mixed C5 also fell, resulting in sluggish transactions. Despite the lackluster market atmosphere, cracked C5 residual liquid factories are holding firm on prices and maintaining shipments supported by high cracked C5 prices. However, negative factors at the terminal end have limited buying and selling activities.

5. Isoprene (Piperylene): Domestic isoprene markets saw slight increases in some areas yesterday. Low supply continues to support market prices; however, following three consecutive days of crude oil declines, traders have become more cautious, expecting a wait-and-see approach today. Mainstream ex-factory prices range from CNY 9,200–10,900/ton.

6. Iso-pentadiene: Domestic iso-pentadiene markets continued their strong trend yesterday. Despite crude oil's three-day decline, tight product supply persists, supporting sellers in maintaining prices. Today, low-priced listings are expected to catch up with gains. Mainstream offer prices in East China range from CNY 14,900–15,500/ton.

7. Dicyclopentadiene (DCPD): Domestic DCPD prices remained steady yesterday. Self-pickup prices ranged from CNY 10,100–10,600/ton, with the lower end primarily serving established customers. Auction prices held at CNY 10,600/ton. Spot supply remains limited, with the market driven solely by rigid demand.

8. Road Marking Paint C5 Petroleum Resin: Mainstream prices for road marking paint C5 petroleum resin ranged from CNY 9,850–11,200/ton yesterday. Terminal demand remains limited to rigid needs. Meanwhile, persistent losses in non-deep-processing sectors are exacerbating cost pressures for resin manufacturers. Trading activity is stagnant, and negotiated prices remain stable.

9. Adhesive C5 Petroleum Resin: Mainstream prices for isoprene adhesive C5 petroleum resin ranged from CNY 12,000–13,600/ton, while cyclohexane-free adhesive C5 petroleum resin prices ranged from CNY 10,800–11,200/ton. Volatile international crude oil prices have intensified cautious purchasing behavior among terminals. In the short term, cost pressures and supply shortages dominate the market for resin manufacturers, providing price support and leading to consolidation at high levels.

Core Logic: Cracked C5 remains temporarily stable; Iso-pentadiene sees localized gains; Isoprene sees localized gains; DCPD remains temporarily stable; C5 petroleum resin prices show sporadic increases.

II. Price Summary Table

Table 1: Domestic Cracked C5 Industry Chain Summary (Unit: CNY/ton)

III. Market Outlook

Although crude oil closed with a rebound yesterday, market sentiment remains pessimistic. Shandong mixed C5 prices are still expected to decline, forming a bearish factor for residual liquid. Sentiment regarding residual liquid is weak, with virtually no transactions occurring across various regions yesterday, which drags down cracked C5 performance. Regarding pentadiene monomers, low inventory levels provide some price support. In the resin sector, road marking applications are currently in a seasonal off-period with weak demand, while adhesive applications maintain only rigid demand procurement. Additionally, the prior pullback in crude oil has fluctuated market sentiment, leading to more cautious purchasing operations.

Cracked C5 Residual Liquid: A downward trend is expected. Domestic demand shows no improvement, and the gasoline market has room for further decline. Refinery shipments of mixed C5, a homogeneous substitute, are poor. Although raw material prices remain firm, the terminal market is bearish. Chempricehub Information predicts that the market for cracked C5 residual liquid faces potential downside in the near term.

Mixed C5: Overnight crude oil rebounded slightly, boosting trader confidence. Gasoline market prices fell yesterday, resulting in poor trading sentiment. Refinery sales and purchases of mixed C5 were sluggish. Chempricehub Information predicts that mixed C5 prices will continue to decline today.

Iso-pentadiene: Prices are expected to stabilize and consolidate. Overall tight supply continues to support iso-pentadiene prices, but volatile crude oil has made traders cautious. Prices are likely to remain stable as the market waits and sees.

Isoprene: Prices are expected to stabilize and consolidate. Factories currently face no significant inventory pressure, which supports prices. However, combined with crude oil volatility and weak downstream performance, isoprene prices are expected to remain stable in a wait-and-see mode.

Dicyclopentadiene (DCPD): A consolidating trend is expected. There are no immediate increases in spot supply in the short term, while downstream rigid demand is maintained despite high costs. Amidst this supply-demand tug-of-war, prices are expected to consolidate.

C5 Petroleum Resin:

• For Road Marking Paint: Manufacturers' spot availability is scarce in the short term. However, downstream rigid demand continues to recede, and international crude oil prices are trending downward. Negotiated prices are expected to remain basically stable.
• For Adhesives: Downstream peak-season demand is below expectations, while manufacturer supply volumes are low. Negotiated prices are expected to remain stable.

IV. Data Calendar

Table 2: Domestic Cracked C5 Industry Chain Data Overview (Unit: 10,000 tons)