Spot prices for C5 petroleum resin surged, while genuine demand faced pressure.

Key Market Focus Points for C5 Petroleum Resin:

1. International crude oil prices remain volatile at high levels, and supply shortages are dominant. Feedstock supplies of C5 and piperylene are tight.
2. High feedstock costs squeeze resin profit margins, while downstream buyers find it difficult to chase price increases, revealing gradually weakening real demand.
3. Amidst feedstock shortage sentiment, end-users continue to build precautionary stocks to avoid risks.

I. Tight Feedstock Supply and High Prices

During the pre-holiday and holiday periods, industrial pyrolysis C5 prices remained stable at around 7,300 RMB/ton, with private sector prices ranging from 7,100 to 7,300 RMB/ton. Domestic piperylene prices held firm at 9,200–10,000 RMB/ton. Pre-holiday pyrolysis C5 output was 75,300 tons; last week’s output rose by 600 tons, a month-on-month increase of 0.8%, with a capacity utilization rate of 74%. Output during the holiday remained largely flat, making it difficult to boost supply volumes. Consequently, piperylene supply could not increase either, maintaining a tight inventory situation.

II. Limited C5 Petroleum Resin Production and Low Inventory Levels

Weekly supply of C5 petroleum resin was 9,500 tons, with an operating rate of 73.47%, reaching a relatively high level for the year. The overall price of feedstock pyrolysis C5 (7,100–7,300 RMB/ton) saw a significant pullback compared to the sharp rise in previous private sector prices. Additionally, policy adjustments in the northern oil product market led to increased deep processing flows of pyrolysis C5, while rising resin prices boosted profits, resulting in a notable recovery in the operating rate.

From an inventory perspective, C5 petroleum resin production has maintained a relatively low level. Continuous destocking occurred from July to September. Due to increased production and the National Day holiday, restocking took place before the holiday. Inventory levels rose slightly during the holiday but remain at lower-than-average levels for the year, indicating limited spot availability.

III. C5 Petroleum Resin Consumption Remains Positive

Regarding consumption trends: In the hot-melt coatings sector, some emergency repair projects continued throughout the year. Demand in Northern China remains positive, while Southern China is relatively stable. Small-batch stockpiling occurred in the North before the holiday, whereas Southern buyers mostly waited until after the holiday. A slight consumption pullback was observed during the holiday. It is expected that manufacturers will follow up on orders and initiate a restocking wave after the holiday. In the hot-melt adhesives sector, there is still a risk of oil shortages in October. End-user risk-aversion sentiment has risen, leading to plans for building safety stocks. Market transaction volumes increased before the holiday, with a minor pullback in usage during the holiday. Most manufacturers are currently below their safety stock levels, suggesting improved consumption after the holiday.

Table 1: C5 Petroleum Resin Supply-Demand Balance Sheet

Data Source: Chempricehub Information

IV. Spot Supply Remains Tight Post-Holiday, Though Trends May Be Dragged Down by Macro Environment

During the holiday, international crude oil prices fell rapidly below $90/barrel. On the supply side, there is an urgent need to alleviate inventory pressures, while international shipping disruptions affect supply. On the end-user side, snowfall has begun in Northern China, signaling the wind-down phase for road marking paint applications, leading to expectations of a weaker market. In the hot-melt adhesives sector, most small and medium-sized clients maintain rigid demand purchasing, resulting in insufficient market transaction volumes. Overseas markets also only meet rigid demand, with most forecasts suggesting Q4 demand will be lower than Q3.

In the short term post-holiday, the tight circulation pattern of C5 petroleum resin spot goods remains unchanged. Feedstock C5 and piperylene prices remain relatively firm with minor localized pullbacks. Manufacturers face tight spot inventories, so further price pushes cannot be ruled out. However, as international crude oil prices correct in November and end-user demand contracts, export pressure persists, which will likely drag down C5 petroleum resin prices.