No. 120 Solvent Naphtha

Market Intelligence on No. 120 Solvent OilI. Price Trends1. **Domestic Market**: Over the past week, the mainstream transaction price of No. 120 solvent oil has fluctuated in the range of 7,800–8,200 RMB/ton. The average price in the East China region has increased by approximately 2.3% compared to the beginning of the month, while the South China region has seen a 3.1% increase due to tight supply.2. **International Market**: FOB Southeast Asia prices remain stable at USD 980–1,020/ton. Influenced by fluctuations in crude oil prices, offshore quotes have not shown significant directional changes.II. Supply and Demand Dynamics1. **Supply Side**: - Domestic refinery operating rates are maintained at approximately 78%. Some refineries in the Shandong region have temporarily suspended operations due to environmental inspections, leading to a regional reduction in supply. - Import arrivals have decreased by 15% month-on-month, primarily due to supply contraction caused by overseas facility maintenance.2. **Demand Side**: - The coatings industry has entered its traditional peak season, with downstream operating rates increasing to 85%, boosting demand for No. 120 solvent oil by 12%. - Demand from the adhesives and ink industries remains stable, but procurement volumes from some small and medium-sized enterprises have decreased due to environmental policies.III. Costs and Profits1. **Raw Material Costs**: - Straight-run gasoline prices have increased by 200 RMB/ton this week, and aromatics extraction costs have risen synchronously, strengthening cost support for No. 120 solvent oil. - International crude oil prices are fluctuating in the range of USD 80–85/barrel, slightly alleviating cost-side pressure.2. **Production Profits**: - The theoretical profit margin for refineries has narrowed to 300–400 RMB/ton, a decrease of approximately 15% compared to the previous month.IV. Inventory and Logistics1. **Inventory Levels**: - Total domestic social inventory is approximately 120,000 tons, down 8% month-on-month, with a 12% decrease in the East China region. - Port inventory remains at low levels, with less than 50,000 tons of circulating goods available at major ports.2. **Logistics Impact**: - In the East China region, typhoon weather has reduced loading and unloading efficiency at some ports, increasing logistics costs by approximately 50 RMB/ton.V. Relevant Policies and Events1. The Ministry of Environmental Protection has strengthened controls on VOCs emissions, requiring some downstream enterprises to upgrade waste gas treatment equipment, which has slowed procurement pace in the short term.2. The Shandong region has launched a special safety production inspection plan, which may further restrict refinery operating rates.VI. Analysis and Assessment1. **Short-Term Drivers**: - The combination of supply-side contraction and peak demand is pushing prices to remain firm. - Cost-side support is solid, but compressed profit margins limit the extent of price increases.2. **Risk Points**: - Significant fluctuations in crude oil prices may be transmitted to downstream products. - Stricter-than-expected enforcement of environmental policies could lead to a sharp decline in demand.VII. Price Forecast1. **Next Week**: No. 120 solvent oil prices are expected to remain in a high-level range, with mainstream transaction prices likely to operate between 7,900–8,300 RMB/ton.2. **Medium-to-Long Term (1 Month)**: If supply-side recovery remains slow and demand continues to improve, prices may break through 8,500 RMB/ton. Conversely, if crude oil prices fall or environmental policies become stricter, prices may retreat to the 7,600–7,800 RMB/ton range.