Mineral oil

Recent Market Dynamics Report on White Oil

1. Price Trends
- The domestic white oil market is experiencing narrow-range fluctuations. Price movements vary slightly by grade: low-viscosity white oil prices remain relatively stable, while medium- and high-viscosity white oil prices have seen minor ups and downs.
- In the East China region, the mainstream price for industrial-grade No. 5 white oil is [X1] RMB/ton, representing an increase of [X2] RMB/ton from the previous week, with a rise of [X3]%. The mainstream price for industrial-grade No. 10 white oil is [X4] RMB/ton, remaining basically flat. The mainstream price for industrial-grade No. 15 white oil is [X5] RMB/ton, decreasing by [X6] RMB/ton, with a drop of [X7]%.
- In the South China region, the mainstream prices are [X8] RMB/ton for industrial-grade No. 5 white oil, [X9] RMB/ton for industrial-grade No. 10 white oil, and [X10] RMB/ton for industrial-grade No. 15 white oil. The price fluctuations for all grades remain within [X11] RMB/ton.

2. Supply Situation
- The operating rate of domestic white oil producers remains stable, with overall supply volume showing little change. Major refineries are operating normally, and white oil production is sufficient to meet market demand.
- On the import front, white oil import volumes have decreased recently, primarily due to international price volatility and increased transportation costs. The arrival volume of imported white oil fell short of expectations, weakening its supplementary effect on the domestic market supply.

3. Demand Situation
- Downstream industry demand shows divergence. The rubber and plastic sectors maintain stable demand for white oil, with enterprises purchasing according to need and order volumes showing no significant changes.
- The textile and printing industries have entered their traditional off-season, leading to reduced demand for white oil. Some enterprises exhibit low purchasing enthusiasm, focusing instead on depleting existing inventories.
- The cosmetic and pharmaceutical industries continue to show growing demand for high-quality white oil. However, due to the stringent quality requirements of these sectors, the purchase volumes remain relatively limited.

4. Cost Factors
- Crude oil prices have recently exhibited volatile trends, providing limited support for white oil costs. The prices of base oil, the primary raw material for white oil production, have seen minimal fluctuation. Consequently, cost-side changes have had a limited impact on white oil market prices.

Analysis and Judgment

1. Reasons for Price Fluctuations
- The stability of low-viscosity white oil prices is mainly attributed to its wide range of applications, rigid demand, and ample supply, resulting in a balanced market supply and demand.
- The minor fluctuations in medium- and high-viscosity white oil prices are influenced by changes in downstream demand; for instance, reduced demand from the textile and printing sectors has put downward pressure on prices. Additionally, some producers have adjusted their ex-factory prices to facilitate sales.
- The reduction in imports has had a certain impact on domestic supply. However, as domestic producers can meet most of the demand, this has not driven significant price increases.

2. Supply and Demand Relationship
- Overall, the white oil market supply and demand are basically balanced. On the supply side, domestic production operates stably, and the decline in imports has had a limited impact. On the demand side, downstream industries show mixed performance, with varying demand patterns across different white oil grades.

Forecast

1. Price Trends
- In the short term, white oil market prices will continue to maintain a narrow-range fluctuation pattern. Low-viscosity white oil prices are expected to remain stable, while medium- and high-viscosity white oil prices may experience minor adjustments due to downstream demand changes, though the magnitude will not be significant.
- In the medium to long term, if crude oil prices experience substantial volatility or if there are significant changes in downstream industry demand, white oil prices may adjust accordingly. For example, if the peak season for the textile and printing industries arrives, increasing demand for medium- and high-viscosity white oil, prices may rise. Conversely, if crude oil prices drop significantly, weakening cost support, white oil prices may decline.

2. Supply Situation
- The operating rates of domestic white oil producers are expected to remain stable, with little change in supply volume. Regarding imports, if international prices fall or transportation costs decrease, import volumes may increase slightly, but the overall growth is expected to be limited.

3. Demand Situation
- Demand from the rubber and plastic industries for white oil will remain stable. Demand from the textile and printing industries is expected to recover as the peak season approaches. Demand for high-quality white oil in the cosmetic and pharmaceutical sectors will continue to grow, although the growth rate may be relatively slow.