It will still take time for white oil market demand to gradually pick up

Returning from the holiday after the new year, white oil entered the decline mode in February and fell. The amplitude is relatively large, with market prices generally falling from a year ago, ranging from 200 to 1,000 yuan/ton. Late January coincides with the traditional Spring Festival, and market trading is light before and after the holidays. Coupled with the outbreak of the epidemic at the beginning of the month, the market is even worse. The resumption of downstream work is delayed, logistics and transportation are restricted, market transactions are sluggish, refinery inventories are overstocked, and some refineries The operating load has been reduced one after another. According to statistics from Zhongyu Information, the average price of 5# white oil in the domestic market is 5,012 yuan/ton, a significant decrease of 640 yuan/ton from the average price a year ago, equivalent to a percentage of 11.32%.

The market struggled to see significant improvement in early March. Although individual refinery prices rose, the overall oil price basically maintained a weak and stable trend. As the number of new confirmed cases of the epidemic gradually declines, companies in various places have successively obtained approval to resume work. According to a survey of 25 production companies, more than 80% of white oil production companies have resumed work, and some companies have stated that they will resume work next week. The downstream industries of white oil are mainly concentrated in the textile industry, ink oils, lubricants, PS, adhesives and other industries. In the textile industry, chemical fiber oils are used during chemical fiber processing. Chemical fiber oils mainly include smoothing agents, emulsifiers and antistatic agents. White oil is mainly used as a smoothing agent in chemical fiber oils, and low-viscosity white oil is mostly used in a certain proportion. The resumption of work and production of textile enterprises is generally progressing steadily. The number of resumption of work and the number of people returning to work continues to increase. The resumption of work and production in the upstream links of the textile industry chain is relatively good. Most enterprises have resumed production. The situation of resumption of work and production of mid-stream and downstream enterprises has also gradually improved. In the lubricating oil industry, most companies have not yet started operations and are expected to resume operations in the middle to late half of the year. Currently, market procurement demand is limited, and market procurement enthusiasm has not yet fully recovered. In terms of PS, the market is showing a downward trend, raw materials have limited support for market costs, merchants have insufficient confidence in the market outlook, and downstream factories are generally less enthusiastic about entering the market to obtain goods. It is expected that as demand gradually recovers in the later period, market trading enthusiasm will improve significantly.

In the later stage, white oil production companies will resume operations one after another, and downstream operations are expected to resume operations in the middle to late half of the year, and market trading enthusiasm will gradually pick up. The price trend of crude oil will rebound in the later period, but the price center may still move downward. However, this round of refined oil products initially showed downward expectations. Transportation in some areas is still restricted, and market operations are not enthusiastic. Overall, the good news is limited, and white oil is expected to Market demand will still take some time. As downstream factories start operations one after another in the second half of the year, the digestion of market resources will accelerate, and the market trading atmosphere will gradually recover.