Morning Market Briefing on the C5 Industry Chain

I. Key Focus Areas

1. Mediators such as Qatar continue to push for US-Iran negotiations, easing market concerns and causing international crude oil prices to decline. NYMEX WTI crude futures (December contract) fell by $0.81/bbl to $86.04/bbl (-0.93% WoW); ICE Brent crude futures (January contract) dropped by $1.08/bbl to $91.49/bbl (-1.17% WoW). China INE crude oil futures (SC2701 contract) fell by 31.4 yuan/barrel to 599.3 yuan/barrel; the night session declined by 9.1 yuan/barrel to 590.2 yuan/barrel.

2. As of the 10th, Japanese naphtha closed at $860.25/ton, a decrease of $68/ton from the previous trading day. Singapore naphtha closed at $91.98/barrel, down $7.47/barrel from the previous trading day.

3. Yesterday, domestic pyrolysis C5 prices from major producers remained weak. Shandong mixed C5 prices fell to around 6,700 yuan/ton, widening the gap with pyrolysis C5 prices. Meanwhile, commodity markets declined broadly; Shandong xylene prices dropped to approximately 7,250 yuan/ton, falling more than 1,000 yuan/ton compared to last week's levels. Overall, significant recent declines in oil product components have exerted bearish pressure on the market. From an end-use perspective, industry sentiment remains weak, with low buying enthusiasm, posing potential downside risks across the entire industrial chain.

4. Yesterday, prices for pyrolysis C5 residual liquid stabilized in some regions while dipping slightly in others. Following yesterday's drop in gasoline market prices, shipping activity was mediocre. Mixed C5, a substitute product, followed suit with price declines, resulting in poor transaction volumes. Bearish sentiment from downstream sectors has led some pyrolysis C5 residual liquid markets to maintain stable prices while waiting for clarity, though sporadic price drops occurred in certain areas.

5. The domestic isoprene market remained largely stable yesterday, with minor adjustments in specific areas. Producers currently face no inventory pressure, while downstream users are mostly in wait-and-see mode, purchasing only strictly necessary quantities. Mainstream ex-factory prices ranged from 9,200 to 10,900 yuan/ton.

6. The domestic polyisoprene (synthetic rubber) market was generally stable yesterday, with slight increases in lower-end segments. Limited tradable resources within the market resulted in thin trading activity, primarily focused on executing prior orders and long-term contracts. Mainstream offer prices in East China ranged from 14,900 to 15,500 yuan/ton.

7. Yesterday, domestic dicyclopentadiene (DCPD) self-pickup prices were between 10,300 and 10,600 yuan/ton, with the lower end mainly serving established clients. Auction prices held steady at 10,600 yuan/ton. Although an auction in Northeast China failed yesterday due to lack of bids, spot market supply has not increased significantly. Supported by rigid downstream demand, prices maintained a firm trend.

8. Mainstream prices for road marking paint C5 petroleum resin were between 9,850 and 11,200 yuan/ton yesterday. Continuous pullbacks in international crude oil prices have intensified bearish sentiment among end-users. Simultaneously, cost pressures on resin manufacturers continue to rise, leading to a stalemate in market transactions and stable negotiated prices.

9. Mainstream prices for isoprene adhesive C5 petroleum resin were between 12,000 and 13,600 yuan/ton, while cyclopentane-free adhesive C5 petroleum resin prices ranged from 10,800 to 11,200 yuan/ton. Volatile downward trends in international crude oil prices have heightened cautious procurement attitudes among end-users. However, short-term market dynamics are dominated by rising costs and supply shortages for resin manufacturers, keeping negotiated prices consolidating at high levels.

Core Logic: Pyrolysis C5 declined; polyisoprene saw minor local gains; isoprene experienced minor local gains; DCPD consolidated; C5 petroleum resin prices remained stable.

II. Price List

Table 1: Summary of Domestic Pyrolysis C5 Industrial Chain (Unit: Yuan/Ton)

III. Market Outlook

Crude oil continued to fall at yesterday's close. Shandong mixed C5 prices hovered around 6,750 yuan/ton, with an order fulfillment rate of 31%, indicating weak transactions; further downside potential exists today. Shipping activities for residual liquids were weak across all regions, with few inquiries against quoted prices. Aromatic products fell by over 1,000 yuan/ton weekly, reflecting overall weakness in oil product components, which negatively impacts raw material pricing. Downstream procurement enthusiasm for resins remains weak, with strong wait-and-see sentiment prevailing in the industry.

The pyrolysis C5 residual liquid market is expected to face downward pressure. Improvements in Middle East tensions have led to a clear decline in international crude oil prices, while domestic demand shows no improvement, leaving room for gasoline prices to fall. Refineries producing mixed C5, a substitute product, are following the price drop. With bearish sentiment dominating the market, Chempricehub anticipates that the pyrolysis C5 residual liquid market may see further declines in the near term.

Overnight declines in crude oil have dampened traders' willingness to enter the market. Gasoline prices fell yesterday, with production-sales ratios below 100%. Mixed C5 prices declined yesterday amid poor shipping conditions. Under this bearish atmosphere, Chempricehub expects mixed C5 prices to slip slightly today.

Polyisoprene is expected to remain stable and consolidate in the short term. Tight overall supply continues to provide support; however, significant recent drops in crude oil prices have made traders cautious. Prices are likely to hold steady as the market waits for clearer signals.

Isoprene is also expected to remain stable and consolidate. Lack of inventory pressure at factories provides support, but significant recent declines in crude oil prices and poor downstream order performance suggest that isoprene prices will likely stay flat as the market adopts a wait-and-see approach.

DCPD is expected to maintain a consolidating trend. In the short term, there is no increase in spot supply, while rigid demand persists. Amidst the supply-demand tug-of-war, prices are likely to remain range-bound.

For road marking paint C5 petroleum resin, scarce manufacturer inventories, declining rigid downstream demand, and volatile downward trends in international crude oil prices exacerbate bearish risks, keeping negotiated prices temporarily stable. For adhesive-grade C5 petroleum resin, peak-season downstream demand has fallen short of expectations. However, limited supplier output means supply and demand are roughly balanced in the short term, keeping negotiated prices relatively firm.

IV. Data Calendar

Table 2: Domestic Pyrolysis C5 Industrial Chain Data Overview (Unit: 10,000 Tons)