Petroleum Hydrocarbon Resin outlook stable as crude oil falls but tight C5 derivative supply supports prices

I. Key Focus Points

1. Crude Oil: The U.S.-Iran situation has not escalated prior to the U.S. midterm elections, alleviating supply risk concerns and leading to a decline in international crude oil prices. NYMEX WTI futures (December contract) fell by $0.37/bbl to $96.09, a decrease of -0.38% on a day-on-day basis; ICE Brent futures (January contract) dropped by $1.17/bbl to $103.60, a decrease of -1.12%. China INE crude oil futures (contract 2612) fell by 50.3 RMB/barrel to 694.9 RMB/barrel, with the night session dropping by 16.1 RMB/barrel to 678.8 RMB/barrel.

2. Naphtha: As of November 3rd, Japanese naphtha closed at $1,004.5/ton, down $39.75 from the previous trading day. Singapore naphtha closed at $109.34/barrel, down $5.09/barrel from the previous trading day.

3. Domestic Cracked C5: Yesterday, prices for major domestic cracked C5 producers remained stable. With crude oil closing lower, Shandong mixed C5 prices retreated, and intraday trading was weak, exerting some bearish pressure on residual liquid transactions. In terms of deep processing, isoprene monomer prices rose, providing cost support for resin prices, but buyer enthusiasm remained weak.

4. Cracked C5 Residual Liquid: Prices for cracked C5 residual liquid remained stable yesterday. Following the drop in gasoline market prices, improvements in shipment sentiment were limited. Prices for similar products like mixed C5 declined, resulting in a sluggish trading atmosphere. Although market sentiment was poor, supported by high prices for "Thunder" grade C5, factories producing cracked C5 residual liquid maintained firm pricing. Amidst bearish terminal demand, overall market buying and selling activity remained limited.

5. Isoprene: The domestic isoprene market continued its strong performance yesterday. Tight supply provided ongoing support, with downstream following rigid demand needs. Some auction deals concluded at premium prices. Mainstream ex-factory prices ranged from 9,200–10,900 RMB/ton.

6. Piperylene (Trans-Isoprene): The domestic trans-isoprene market maintained its strong trend yesterday. Tight supply remains the core support factor, with limited tradable resources available in the market. Most downstream buyers are passively following rigid demand. Mainstream offer/bid prices in the East China market ranged from 14,500–15,400 RMB/ton.

7. Dicyclopentadiene (DCPD): The price center for domestic DCPD shifted upward again yesterday. Self-pickup prices stood at 10,100–10,600 RMB/ton, with the lower end primarily serving established clients. Auction prices held steady at 10,600 RMB/ton. Spot availability remains scarce, and while downstream rigid demand persists, the market shows signs of stalemate.

8. Road Marking Paint C5 Petroleum Resin: Mainstream prices for road marking paint C5 petroleum resin ranged from 9,850–11,200 RMB/ton yesterday. Terminal procurement remained based on rigid demand. However, continuous losses in non-deep-processing directions have exacerbated cost pressures for resin manufacturers, leading to a stalemate in market transactions and stable negotiated prices.

9. Adhesive C5 Petroleum Resin: Mainstream prices for isoprene-based adhesive C5 petroleum resin ranged from 12,000–13,600 RMB/ton, while decyclized adhesive C5 petroleum resin prices ranged from 10,800–11,200 RMB/ton. Raw material shortages led to reduced operating rates, and low supply volumes are expected to persist until year-end. Furthermore, raw material prices continue to rise slightly, transmitting cost pressures and shortages downstream. Terminal rigid demand remains steady, pushing prices up by 100–200 RMB/ton in some instances.

   Core Logic: Cracked C5 prices remain temporarily stable; Isoprene and Trans-Isoprene show localized increases; DCPD prices rise; C5 petroleum resin prices see sporadic increases.

II. Price Table

Table 1: Summary of Domestic Cracked C5 Industry Chain Prices (Unit: RMB/ton)

III. Market Outlook

Crude oil closed lower again yesterday, leading to weaker expectations for Shandong mixed C5 prices. Industry participants exhibit significant wait-and-see sentiment, and the gasoline market performance remains relatively soft. Amidst the general caution caused by falling crude oil prices, pentadiene monomers maintain firm prices due to low inventory levels and tight supply. However, downstream procurement of petroleum resins remains limited to rigid demand, hindering effective cost transmission. Overall, cracked C5 prices are expected to remain temporarily stable. Private enterprise auction prices have declined, narrowing the price gap between major state-owned enterprises and private firms.

The cracked C5 residual liquid market is expected to face downward pressure. Domestic demand shows no improvement, and there is room for further declines in the gasoline market. Refinery shipments of similar product mixed C5 are performing poorly. Although raw material markets remain firm, terminal market sentiment is bearish. Chempricehub predicts that the cracked C5 residual liquid market has room for decline in the near term.

Overnight crude oil declines have dampened market entry confidence. Gasoline market prices fell yesterday, resulting in a lackluster trading atmosphere. Refinery mixed C5 prices saw a slight dip, with no obvious improvement in shipment sentiment. Chempricehub forecasts that the mixed C5 market will primarily follow a downtrend today.

Isoprene is expected to consolidate at high levels. While tight supply continues to provide support, two consecutive days of crude oil declines may shift trader sentiment toward caution, suggesting prices will remain temporarily stable as the market waits and sees.

Trans-isoprene is expected to remain temporarily stable and consolidate. Factories currently face no significant inventory pressure, which provides support. However, with crude oil declining for two consecutive days and overall downstream performance being weak, trans-isoprene prices are likely to stay flat amid a wait-and-see approach.

Dicyclopentadiene (DCPD) is expected to operate at high levels. There is no immediate increase in spot supply in the short term, while downstream rigid demand persists despite high costs. Under this supply-demand tug-of-war, the market is expected to remain in consolidation.

For road marking paint C5 petroleum resin, manufacturer spot inventories are scarce in the short term, but downstream rigid demand continues to recede, keeping negotiated prices basically stable. For adhesive C5 petroleum resin, peak season downstream demand remains concentrated, but downstream acceptance of higher prices has weakened. Consequently, prices are expected to stabilize after recent increases.

IV. Data Calendar

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