Blowing Agent

There was no change in prices of n-Pentane, Isopentane, Blowing Agent, n-Hexane, n-Heptane and n-Octane on Monday, January 17, 2022
Energy Prices
INDEX PRICE % TIME(GMT)
WTI Crude $84.12 +0.36 5:23 PM
Brent Crude $86.33 +0.31 5:22 PM
Natural Gas $4.27 +0.23 5:24 PM
17 January 2022 5:36 PM GMT
The tight supply situation is still superimposed, the demand outlook is good, the decline of the US dollar has brought positive support, and the international oil price has risen to the highest point in two and a half months. NYMEX crude oil futures 02 contract 83.82, up $1.70 / barrel or 2.07%; Ice oil distribution futures 03 contract 86.06 rose $1.59/barrel, or 1.88%.
100.00 Chinese Yuan Renminbi =15.751888 US Dollars
1 CNY = 0.157519 USD
1 USD = 6.34845 CNY
We use midmarket rates
Macroscopic
◎ the US federal government debt has exceeded US $29.8 trillion, approaching the US $30 trillion mark.
◎ retail sales in the United States fell by 1.9% month on month in December last year, which was far lower than the month on month flat expected by economists, and reached the largest decline in 10 months, indicating that at the time of the surge of new crown infection, the fastest inflation in decades is having a greater impact on consumers.
◎ the US manufacturing output value fell unexpectedly by 0.3% in December. Economists expected it to increase by 0.3% before that, and the data of the previous month was revised to increase by 0.6%. The total industrial output value, including the output value of mining and public utilities, decreased by 0.1%.
◎ the U.S. University of Michigan consumer confidence index fell to 68.8 in January from 70.6 in December last year, the second lowest in a decade, lower than the median expected by economists surveyed.
◎ Germany’s GDP growth of 2.7% in 2021 is in line with expectations, but still lower than the level before the crisis. It is estimated that the German economy will shrink by 0.5% to 1% in the fourth quarter of 2021, which may encounter the second economic recession since the outbreak of the epidemic.
In November 2021, the GDP grew by 0.9% in the UK, the first time the economy exceeded the pre COVID-19 level, which was 0.7% higher than that in February 2020. In November last year, the output of service industry, production sector and construction industry in the UK increased month on month.
◎ the Bank of Korea announced an interest rate increase of 25 basis points to 1.25%, which also made South Korea the first major Asian economy to raise interest rates this year.
◎ on January 14, the central bank launched a 7-day reverse repurchase operation of 10 billion yuan. On that day, 10 billion yuan of reverse repurchase expired. Therefore, the maturity was fully hedged. This week, the central bank invested a net 10 billion yuan in the open market.
◆ Industry News
◎ domestic refined oil will rise for the first time in the year
At 24:00 on January 17, 2022 (i.e. 0:00 next Tuesday), the window of refined oil price adjustment will open again. At that time (on January 17), the theoretical increase corresponding to the price adjustment of domestic refined oil is expected to be about 330 yuan / ton, which will usher in an increase.
◎ review the domestic white oil market around the price line
In 2021, the domestic white oil market rose all the way. After rising to the highest point in the year in the fourth quarter, there was a correction, and it showed a steady upward trend in the rest of the year. Taking 5# white oil as an example, the market price at the beginning of the year was 4137.5 yuan / ton, the highest during the year was 8250 yuan / ton, an increase of 99.39%; At the end of the year, the market price was 7050 yuan / ton, an increase of 70.39% over the beginning of the year and – 14.55% over the highest point of the year.
◎ stable supply of paraffin wax, mainly limited resources
The paraffin wax market continues the stable trend, the upstream is still limited supply, and the downstream just needs to be purchased. Some traders and terminals just need to prepare goods before the festival. It is expected that the shutdown of logistics will be partially affected next week, and the price of short-term paraffin will remain stable.
◎ the promotion of polyester filament is not expected
There is a game between cost and supply and demand. The polyester filament market is running rigidly. Most downstream users at the trader level believe that there are still sales promotion expectations in the market recently. Considering the cost pressure, the discount range is expected to be limited, while the polyester filament production enterprises believe that the sales promotion expectations are small, which depends on the price trend of raw materials.
◎ near the end of the year, PTA takes advantage of the situation
PTA supply is expected to increase. Although the Spring Festival holiday is coming, the polyester load on the demand side may decline limited, and the liquidity of the spot market is still tightening, which supports the price to a certain extent. The market is optimistic about the recovery of textile demand, superimposing the strength of the cost side; Therefore, it is expected that the short-term PTA market will continue to adjust at a high level. However, the obvious repair of the processing range and the weakening of supply and demand in the future may inhibit the increase.
◎ the contradiction between supply and demand is eased, and the short-term pressure of ethylene glycol is weakened
Zhenhai Petrochemical started its test run this week and is about to achieve mass production. As the Spring Festival approaches, seasonal load reduction is inevitable on the demand side. However, the load of ethylene glycol unit was temporarily reduced, the polyester load continued to be repaired, the contradiction between supply and demand was alleviated, and the adjustment pressure of ethylene glycol was weakened due to the strong performance of international crude oil.
◎ weak demand and weak price rise of household paper
At present, the household paper market is basically stable. As of January 14, the mainstream price of Hebei wood pulp axis market was 6,400-6,500 yuan / ton, that of Shandong wood pulp axis market was 6,400-6,500 yuan / ton, that of Sichuan bamboo pulp axis market was 6,800-6,900 yuan / ton, and that of Guangxi sugarcane pulp axis market was 5,900-6,000 yuan / ton. Some small and medium-sized paper enterprises in the North began to shut down for holidays. After proper preparation in the early stage, the downstream processing plants give priority to digesting their own inventory, and the terminal follow-up is slow. Affected by the support of raw materials, the living base paper enterprises have high enthusiasm to push up. However, affected by the weak overall demand, the implementation of price increase remains to be observed. Most paper enterprises mainly go to the warehouse to recover funds.
◎ concentrated production capacity and rapid development of ethylene industry
At present, China’s total ethylene production capacity has reached 44.59 million tons / year, up 6.19% year-on-year. Although the new production enterprise is a refining and chemical integration project, whether the production time of its supporting downstream units matches the output time of raw materials is still an important factor affecting the domestic ethylene market price.
◎ price summary of East China pure benzene in 2021
Pure benzene rose strongly in 2021. In addition to repairing the low price caused by health events in 2020, the centralized production of new downstream demand also boosted the price rise. During the year, the market activity continued to increase compared with 2020, and the price fluctuated frequently and greatly. In 2021, the average annual price of pure benzene in East China was 6,783 yuan / ton, an increase of 2,787 yuan / ton or 67.7% compared with 3,996 yuan / ton in 2020. The annual lowest price is 4,280 yuan / ton, which appeared in January, and the highest price is 8,900 yuan / ton, which appeared in September.
◎ isopropanol: the rising trend is obvious. Can accidents occur?
For reference to major enterprises, the factory did not plan to stop for maintenance in February. The monthly output was higher than 32,000 tons, the domestic demand was less than 20,000 tons, and the export was less than 10,000 tons. In addition to a certain amount of import, the surplus was not small. If there is no substantive support, it is difficult to be positive. Therefore, it mainly depends on whether the factory can stop and reduce production in February.
◎ brief analysis of butanone market operating rate and production forecast in January
In 2021, the total output of butanone in China will be 489,500 tons, and the average operating rate will be around 68%. In December, the output of butanone was 48,400 tons. Due to the restart of Hunan Ruiyuan unit, the operating rate rebounded in a narrow range. At the end of the month, Ningbo Jinfa plant was shut down. Due to the small loss, the impact on the output of the current month was limited.
◎ the output of domestic PVC production enterprises will resume in 2021
Under the long-term impact of global environmental protection and domestic double carbon policy, the transformation and upgrading of the coal industry is still bound to have a great impact on the coal industry. The sudden tightening of the double carbon policy in 2021 and the sharp tightening and tension of coal supply and price caused by the global epidemic will affect the downstream industrial derivatives centered on coal; The energy cost will increase significantly. In the long term, the high cost may become the norm. The low-cost advantage of coal based industry will counter attack and become a medium and high-cost variety of various energy sources. Looking at PVC, the cost of calcium carbide production enterprises in 2022 is high, and the cost of supporting enterprises in their own upstream industries has advantages, and the non supporting enterprises will fall into the edge of loss or long-term loss, It will continue to restrain the space for output increase of calcium carbide production enterprises.
◆ industry trends
◎ the scale of China’s foreign trade exceeded the $6 trillion mark for the first time. According to customs statistics, the total import and export value of China’s goods trade in 2021 was 39.1 trillion yuan, an increase of 21.4% over 2020; Among them, the export was 21.73 trillion yuan, an increase of 21.2%; Imports reached 17.37 trillion yuan, an increase of 21.5%.
◎ National Bureau of Statistics: in December 2021, the sales price of commercial housing showed a downward trend month on month, and the year-on-year increase decreased. The sales price of new commercial housing and second-hand housing in first tier cities decreased by one month, and that in second and third tier cities decreased.
◎ State Post Office: in 2021, the business volume of national express service enterprises totaled 108.3 billion pieces, a year-on-year increase of 29.9%; Business income totaled 1,033.23 billion yuan, a year-on-year increase of 17.5%.
◎ China Academy of information and communications announced that in 2021, China’s 5g mobile phone shipments reached 266 million, a year-on-year increase of 63.5%, accounting for 75.9% of mobile phone shipments in the same period, far higher than the global average of 40.7%.

The price of pentane foaming agent rose twice in a row today.
The prices of pentane foaming agent products adjusted twice today. The prices of products with larger propotion n-Pentane content in mixed pentanes have increased by 0.83% and 0.82% respectively. The prices of other foaming agents, pentane, hexane, heptane and octane products have not changed. In the last week, there were 10 products with rising prices, accounting for 67%, and 1 product with falling prices, accounting for 7%; 4 flat varieties, accounting for 27%; Among them, the top three products with price increase are Pentane Blowing Agent (↑ 1.67%), n-Pentane, 95% (↑ 1.59%), n-Hexane, 60% (↑ 1.33%), and n-Heptane, 99% (↓ – 6.58%) with the largest price decrease.
During the month, due to the spread of the new crown variant strain “Omicron”, and the effect of the existing vaccine against “Omicron” was not as good as that against the early new crown strain, the global financial and commodity markets fluctuated sharply, and many chemicals fell deeply. However, in the middle of the month, the national development and Reform Commission The Ministry of industry and information technology, together with relevant parties, jointly issued the implementation plan on Invigorating the operation of industrial economy and promoting high-quality industrial development. A series of measures to stabilize prices and ensure supply have gradually achieved results, and the downward trend of bulk commodities has gradually slowed down. In the second half of the month, with the continuous surge of European energy prices, crude oil has rapidly rebounded to a high level, and the rebound of energy and costs has increased the confidence of chemical products, The market of chemicals was strong at the end of the year, but on the whole, most of them still fell during the month.
n-Pentane: under the pressure of product cost, the prices of pentane manufacturers continue to rise; Subsequently, affected by the epidemic in Zhejiang, the delivery of Ningbo Juhua was blocked, and the load of the unit was reduced. Under the expectation that the on-site resources may be reduced, the mentality of the operators is acceptable, the inventory of the production enterprises is not under pressure, and some cargo holders are reluctant to sell, and the focus of negotiation is rising; With the price rising to a high level, the fatigue of the downstream demand side is becoming more and more obvious, and the on-site trading is slightly light. However, under the support of small inventory pressure, the market mostly maintains the trend of horizontal consolidation.
n-Hexane: in early January, the n-Hexane market continued to rise. On the one hand, the naphtha market fluctuated upward, the cost side actively pushed up, and n-Hexane followed up. On the other hand, tight supply and demand supported strong prices. At the beginning of the month, the start of n-Hexane decreased, the downstream market was bargain hunting and replenishment, and the center of gravity of n-hexane moved upward; Although some maintenance devices were restarted in the middle and late ten days, the on-site inventory was low, the export volume of main manufacturers was small, and the spot was tight. Near the Spring Festival and new year’s Day holidays, the downstream market had a tendency to prepare goods, and the procurement enthusiasm was OK. However, with the rise of n-Hexane price, the downstream resistance increased, the procurement slowed down, and the on-site was in a state of submission and investment at the end of the month.
n-Heptane: in December, the domestic market price of n-Heptane continued to fall. At the beginning of the month, the external market of butadiene was more stable than expected, the merchant’s mentality was supported, and the intention was to make an offer. However, the supply of goods in the market is abundant, and the spot transaction is slow, resulting in inventory accumulation. Sinopec’s supply price has been lowered continuously, gradually approaching the market price. The market price of domestic n-Heptane fell due to the superposition of multiple negative factors. In the middle of the month, the delivery of some slightly high price offers was not smooth, and the merchant offers followed the transaction price down. However, as the price of n-Heptane fell to a relatively low level, the downstream bargain hunting boosted the market, the transaction atmosphere improved slightly, and the decline of n-Heptane market slowed down. Some goods in the northern market were sold with a small price increase, and the mentality of merchants was supported to test the price increase shipment, but the downstream demand was limited. After a small rise in the market, it fell back and gradually fell to the lowest point of the year. In terms of supply, the n-Heptane unit is basically in normal operation this month. The manufacturer expects that the maintenance will be completed next month. In addition, the phase II unit will be put into operation soon, and the supply stock increment is expected. During the month, the arrival at the ship port increased, the trade volume in the tank farm circulated slowly, and the overall inventory was relatively high. Downstream procurement enthusiasm is not high, sporadic rigid demand exists, and the contradiction between supply and demand in n-Heptane market deepens. On the whole, the price competition between the internal and external markets intensifies, the self delivery of cans in Qingdao is gradually lower than the price in the external market, and the price difference still tends to expand. Moreover, the external market is affected by the decline of the domestic spot market, and there is still a downward trend under the continuous pressure of trading. Due to insufficient follow-up of downstream demand and continuous decline of inquiry price, it is difficult to find favorable support for n-Heptane market. It is expected that the domestic n-Heptane market price will continue the weak and volatile trend next month. On December 28, the price of n-Heptane decreased the most in the previous month, with a decrease of – 6.58%.
Pure Benzene: this month, the domestic pure benzene market rose and fell. At the beginning of the month, after the price of pure benzene fell, pure benzene rose with the shock due to the rebound of styrene. However, due to the high inventory operation in East China, the market was cautious, the buying was relatively light, the market was short, the price fluctuated and fell, and some of the early gains were put back. In the middle of the month, affected by the news that new downstream devices were about to enter the market for purchase, traders actively bought goods, which promoted the price rise. However, the new devices were not put into operation as scheduled, the market mentality quickly changed to caution, and the market price changed from rise to fall, mainly downward. In late June, the pure benzene market rebounded after falling. The external price of American Mobil unit rose sharply due to the fire, mainly in the domestic market. Its price rose rapidly. The impact of the health incident in the Yangtze River pilot center continued. The subsequent expected shipping schedule was delayed. The market was worried about the future supply, the on-site trading was positive, and the pure benzene market continued to rise. In the future, the external news surface, crude oil and pure benzene external disk support is better. In terms of supply and demand, in January, the demand for pure benzene is expected to increase before the downstream Festival and the new unit is put into operation. Due to the impact of the epidemic, it is difficult to pick up the goods at the port, and the operating rate of hydrogenated benzene may continue to increase. Pure benzene may continue to operate at a high level in the middle and first ten days of January, but the market may fall with the end of pre holiday preparation. It is expected that the overall trend of pure benzene Market in January will be strong first and then weak.
Junyuan Petroleum Group’s view: the global epidemic data continues to grow, there is no sign of slowdown, and the impact is still expanding. However, the domestic economy is currently in the transition stage from stable credit to wide credit, bulk commodities have formed a “policy bottom”, the expectation of the real estate market is gradually improving, the average interest rate of enterprise loans is at a record low, and the comprehensive financing cost of enterprises is steadily decreasing; Overseas, under the pressure of viruses and supply chain problems, US holiday season consumption hit a 17 year high. The increase in consumer confidence in December exceeded expectations, indicating that the economic recovery has a certain toughness. It is expected that chemicals may maintain an upward repair market before the Spring Festival.

Hot spots in chemical industry

February WTI crude oil (CLG22) on Tuesday closed up +0.91 (+1.20%), and February RBOB gasoline (RBG22) closed up +1.98 (+0.88%).

WTI crude oil and RBOB gasoline prices on Tuesday closed moderately higher, with crude climbing to a 5-week high.  Crude prices rallied Tuesday on optimism the less severe omicron Covid variant will not derail the global economy and energy demand.  Crude prices rose despite the action by OPEC+ on Tuesday to boost its Feb crude output target by 400,000 bpd.

OPEC+ on Tuesday agreed to boost its crude production output by 400,000 bpd in February, as expected.  Crude prices gained even after the decision by OPEC+ to hike output since the group’s production increases are likely to be less than what they agreed to.  According to Energy Aspects, only 130,000 bpd of additional OPEC+ crude will hit the markets in Jan, and only 250,000 bpd will make it to global markets in Feb as some countries such as Angola and Nigeria struggle to hit their production targets.

Tuesday’s global economic data was mixed for energy demand and crude prices.  On the positive side, German Nov retail sales unexpectedly rose +0.6% m/m, stronger than expectations of -0.3% m/m.  Also, the German Dec unemployment rate unexpectedly fell -0.1 to a 21-month low of 5.2%, showing a stronger labor market than expectations of unchanged at 5.3%.  On the bearish side, the U.S. Dec ISM manufacturing index fell -2.4 to 58.7, weaker than expectations of 60.0 and the slowest pace of expansion in 13 months.  Also, the U.S. Nov JOLTS job openings fell -529,000 to a 5-month low of 10.562 million, showing a weaker labor market than expectations of 11.079 million.

Crude prices have carry-over support from Monday when the OPEC+ Joint Technical Committee cut its global crude surplus estimate for Q1 of 2022 to 1.4 million bpd, 25% smaller than the 1.7 million bpd it estimated a month ago.  The committee said it saw only a “mild and short-lived” impact from the omicron Covid variant, as “the world becomes better equipped to manage Covid and its related challenges.”

Reduced crude output from Libya is supportive of prices after Libya’s National Oil Corp. said Saturday that Libya crude production will fall by -200,000 bpd to about 700,000 bpd, the lowest in a year, as workers try to repair a damaged pipeline.  The outage comes less than two weeks after militia shut down the Sharara oil field, Libya’s biggest oil field.

Concerns about reduced fuel demand in China are bearish for crude prices.  Goldman Sachs on Tuesday said that China would stick with its Covid Zero strategy and maintain its tight border restrictions for the rest of this year as it prepares to hold the Winter Olympics and other political events later in 2022.

The rapid spread of the omicron variant has bolstered concern that countries may impose travel restrictions to slow the spread of the virus, which would hurt fuel demand and is bearish for crude prices.  New pandemic restrictions are being imposed in parts of Europe.  A record 10 million people worldwide became infected with Covid in the week through Sunday.  The 7-day average of new U.S. Covid infections rose to a record 485,363 on Monday.

An increase in global crude oil stored on oil tankers worldwide is bearish for crude prices.  Vortexa on Monday said that crude oil stored on tankers that have been stationary for at least seven days in the week ended Dec 31 rose +8.6 w/w to 97.32 million bbl.

In a supportive factor for crude oil prices, Iranian crude oil exports are unlikely to come back onto the market anytime soon.  A senior U.S. official said that Iran hadn’t shown seriousness in the latest talks to rejoin the 2015 nuclear agreement, and the U.S. is preparing for a scenario where restoring the deal won’t be possible.

Crude prices rose more than +10 cents/bbl above their Tuesday afternoon closing level when the API reported that U.S. crude inventories fell -6.43 million bbl last week.  The consensus is for Wednesday’s weekly EIA crude inventories to fall -3.65 million bbl.

Last Wednesday’s weekly EIA report showed that (1) U.S. crude oil inventories as of Dec 24 were -7.7% below the seasonal 5-year average, (2) gasoline inventories were -5.6% below the 5-year average, and (3) distillate inventories were -13.3% below the 5-year average.  U.S. crude oil production in the week ended Dec 24 rose +1.7% w/w to a 19-1/2 month high of 11.8 million bpd, which was -1.3 million bpd (-9.9%) below the Feb-2020 record-high of 13.1 million bpd.

Baker Hughes reported last Friday that active U.S. oil rigs in the week ended Dec 31 were unchanged at a 1-3/4 year high of 480 rigs.  U.S. active oil rigs have risen sharply from the Aug-2022 15-year low of 172 rigs, signaling an increase in U.S. crude oil production capacity.