2020 China C4R2 Market Review
In 2020, China’s C4R2 prices dropped to a ten-year low level due to the public health event. Moreover, prices of C4R2 were lower than those of civil-use gas for a long time.
In Q1, 2020, China’s C4R2 prices crashed at first and then fluctuated frequently. On April 1, 2020, China’s C4R2 prices dropped to a five-year low level of RMB 2,430/mt. Influenced by the public health event, China’s most refineries cut the unit operating rates or shut units down. In H2 February 2020, operating rates of alkylation units dropped to an annual low level. Therein, the operating rates of alkylation units in Shandong even declined below 20%. Accordingly, the demand for C4R2 greatly weakened. In Q2, 2020, with the declining international crude oil prices, most refineries were restarted in succession. Moreover, supported by the relatively international crude oil prices, operating rates at refineries increased to high levels. With the recovery of other downstream industries, China’s C4R2 prices rebounded from April 2020. However, profits from alkylate and MTBE production remained negative for a long time due to the tepid gasoline market, so the increment in C4R2 prices was limited. Entering November 2020, the international crude oil prices kept rising, and state-owned refineries purchased gasoline resources from the market intensively. Moreover, the export volume of gasoline went up. Accordingly, the oil-blending feedstock market performed well, giving support to C4R2 prices.
