Weekly Review of Alkylated Oils: (20151016-1022)

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Weekly Review of Alkylated Oil: Weak Demand and a Weak Market Lead to Price Drops 20151016-10221. Overview of the Alkylated Oil Market This week, the alkylated oil market experienced two phases of price changes within just one week. With the smooth flow of alkylated oil, the market rebounded rapidly to 5,350 yuan per ton by the end of last week. However, the downstream market was not receptive to this upward trend; meanwhile, with crude oil remaining weak, the rise in alkylated oils came to an end and they started to decline again. As of this Thursday, the prevailing transaction price for alkylated oil was 5,150–5,250 yuan per ton, a decrease of 150 yuan per ton on a week-on-week basis, representing a decline of 2.83%. 2. Analysis of factors affecting the market next week 2.1 Demand side: Gasoline demand has entered a slow season, with consumption at the end-users’ level being quite low; the pace of replenishment of alkylated oil by downstream users is gradually slowing down. At the same time, expectations for crude oil are bearish; downstream demand for alkylated oils remains primarily driven by essential needs, resulting in limited stockpiling activities. 2.2 On the supply side, the operating rate of domestic alkylation units is expected to remain stable next week, staying above 50%, ensuring sufficient supply capacity. At the same time, considering that the shipment of alkylated oils has been sluggish for about three days now, inventory pressure is expected to increase. 2.3 Raw material aspect: As of this Thursday, the price of post-ether C4 was 4,300 yuan per ton. The operating rates of domestic alkylation units are normal, and there is a steady demand for raw materials used in ether production. However, the profit margins on more highly processed products have narrowed, making operations more difficult; next week, prices of carbon tetra compounds used after ether production may continue to decline.