Tightening supply-demand dynamics coupled with positive end-of-month restocking factors have significantly lifted the high-olefin C5 market.

Introduction:
By the end of June, high-olefin C5 prices in Northwest China saw a notable increase. As of July 2, the average price of high-olefin C5 in the region stood at 7,177 yuan/ton, rising by 446 yuan/ton week-on-week, an increase of 6.63%.

I. Recent Price Trends for High-Olefin C5
Recently, the spot market for high-olefin C5 in Northwest China experienced an initial rise followed by a decline, with price fluctuations ranging from 6,783 to 7,296 yuan/ton. This week, weakening geopolitical support for crude oil led to a drop in international oil prices, with the average price also declining. The refined oil market in Shandong followed suit, with local refineries frequently cutting prices to boost sales, while market transactions mainly centered on spot demand from small-scale buyers. Despite a bearish market atmosphere, the tight supply of high-olefin C5 in Northwest China provided support, resulting in a clear price uptick. Refineries maintained firm pricing to offload inventory, while traders and downstream factories actively entered the market, creating a heated buying and selling environment. However, in the latter half of the week, downstream processing margins for high-olefin C5 in Northwest China deteriorated, leading to resistance among downstream buyers against higher prices. Refineries subsequently lowered prices to move goods, and traders and downstream factories adopted a bearish sentiment, weakening overall market sentiment.

II. Tightening Supply and Demand for High-Olefin C5 in Northwest China
According to Chempricehub Information, the MTO unit at Jiangsu Sailboat (Sierbang) underwent a planned shutdown for maintenance at the end of June. Additionally, the operating rate at the Ningxia Baofeng refinery declined, and Shenhua Baotou underwent a temporary one-week maintenance. These factors reduced the spot supply of high-olefin C5 in Northwest China.

Data source: Chempricehub Information

III. Market Outlook
Crude Oil: International oil prices are expected to have some room to decline next week, with WTI possibly ranging between $63–70/barrel and Brent between $66–73/barrel. The core logic behind this outlook is the continued indirect negotiations between the U.S. and Iran in Doha, which are gradually easing geopolitical tensions. Additionally, Trump's comments that current gasoline retail prices are too high and that the pace of oil price declines is too slow are putting downward pressure on oil prices at the news level.

Demand: The new round of refined oil retail price caps is expected to decrease. Therefore, the news front will not bring positive effects to the oil market. The refined oil market in Shandong is expected to remain lackluster, with refineries still under pricing pressure. Middle- and downstream players will adopt cautious procurement strategies, resulting in subdued market activity. Gasoline prices at independent refineries in Shandong are expected to fall first and then rebound next week.

High-Olefin C5: The domestic high-olefin C5 market is expected to experience a decline followed by a rebound in the near term. Currently, high-olefin C5 offers relatively low cost-effectiveness in downstream applications, suggesting a downward correction. Thus, the domestic high-olefin C5 market is expected to have room for decline next week, although supply-demand fundamentals will limit the extent of the drop.