White Spirit

Recent Market Dynamics of White Naphtha

1. **Price Trends**
- Domestic Market: The mainstream price of white naphtha in the East China region is 7,500–7,800 RMB/ton, up by 100–150 RMB/ton from last week. In South China, prices range from 7,400–7,700 RMB/ton, with an increase of approximately 100 RMB/ton. In North China, prices are 7,600–7,900 RMB/ton, up by 120–180 RMB/ton.
- International Market: The offshore price of white naphtha in the Asia-Pacific region is 950–980 USD/ton, up by 15–20 USD/ton from the previous period. The landed price in Europe is 1,020–1,050 USD/ton, with an increase of approximately 20–25 USD/ton.

2. **Supply Situation**
- Domestic Production Capacity: Some white naphtha producers have scheduled maintenance. For example, a major enterprise in East China plans a 10-day equipment maintenance next week, expected to affect production by approximately 2,000 tons. Meanwhile, new production capacity is in the trial production phase; a new plant in South China is expected to officially start operations by the end of this month, with a design capacity of 50,000 tons per year.
- Import Situation: Recent imports of white naphtha have increased, primarily from the Middle East. Port arrivals have grown by approximately 15% compared to the previous month, but import costs have risen due to higher international freight rates.

3. **Demand Situation**
- Industrial Sector: Demand for white naphtha in the electronics industry is steadily growing, driven by the accelerated update cycle of electronic products, which continuously increases the demand for cleaning-grade white naphtha. As a key consumption sector, the chemical industry has seen improved operating rates recently, leading to increased procurement of white naphtha.
- Civilian Sector: With the arrival of summer, demand for white naphtha in certain civilian cleaning products has slightly increased, although its overall share remains relatively small.

4. **Inventory Situation**
- Producer Inventory: Most producers maintain moderate inventory levels. Some companies have seen inventory declines due to increased recent orders, with the current average inventory level at 15–20 days of production.
- Trader Inventory: Trader inventories are diverging. Some large traders have sufficient stock, while smaller and medium-sized traders have lower inventories, creating a need for restocking.

Analysis and Judgment

1. **Reasons for Price Increases**
- Supply Side: Short-term supply reductions due to producer maintenance, the time lag before new capacity comes online, and rising import costs all support price increases.
- Demand Side: Growing demand in the industrial sector, particularly in electronics and chemicals, has driven up white naphtha prices.

2. **Market Contradictions**
- The time gap between new capacity coming online and existing producers undergoing maintenance may lead to short-term supply volatility.
- Diverging trader inventories: Sufficient stock at large traders may limit upside price potential, while restocking needs from smaller and medium-sized traders provide some support to prices.

Forecast

1. **Price Trends**
- Short Term: Affected by producer maintenance, market supply is tight, and prices are expected to continue rising slightly. Prices in East China are projected to reach 7,800–8,000 RMB/ton, South China 7,700–7,900 RMB/ton, and North China 7,900–8,100 RMB/ton.
- Medium Term: As new capacity comes online and maintained producers resume operations, market supply will gradually increase, slowing the pace of price increases and potentially leading to a high-level consolidation phase.
- Long Term: If downstream demand maintains stable growth, prices are expected to remain at relatively high levels. If demand growth falls short of expectations, prices may face downward pressure.

2. **Supply and Demand Changes**
- Supply: The commissioning of new capacity will gradually increase market supply. Market supply is expected to grow by approximately 10%–15% in the next three months.
- Demand: Demand in the electronics and chemical industries is expected to continue growing, albeit at a slowing pace. Demand is projected to increase by approximately 8%–12% in the next three months.