Rising Feedstock Prices Support IIR Offers
[Introduction] Since late September, the market price of IIR has been rising continuously. Sinopec Yanshan Petrochemical Company raised its price of regular IIR by RMB 1,500/mt, and Zhejiang Cenway New Materials raised its price by RMB 4,500/mt. The price of ARLANXEO’s resources increased by $550/mt in total, and the prices of resources produced by ExxonMobil and Shandong Chambroad Sinopoly New Material were also increased. This price increase is resulting from the rising price of feedstock, driving up IIR producers’ costs.
Rising Crude Oil Price
Since September, crude oil prices have fluctuated upwards. Affected by the hurricane in the United States, the offshore drilling platforms that have not fully recovered have reduced crude oil production by 30 million barrels, which offset OPEC+’s production increase efforts in recent two months. In addition, with the high prices of natural gas and coal and the fear of energy crisis, the demand for crude oil in heating and power generation fields has increased. Whats’s more, the probability of cold winter is high because of La Ni?a, while OPEC+ continues to increase production as planned. The supply-demand gap has led to a further decline in the inventory, and the oil market has reached a high point throughout the year. As of October 14, WTI was $81.31/bbl in November, and Brent was $84.0/bbl in December.
Some IIR resources are priced with reference to the international crude oil price.
Strong Rise of Feedstock MTBE Prices
Driven by the strong rise of the international oil price, the price of liquefied gas in China showed an upward trend, and the cost pressure on MTBE producers further increased. MTBE producers had a strong intention to push up the MTBE price facing losses, and the price of MTBE increased significantly. As of October 14, 2021, China’s domestic MTBE market price averaged at RMB 6,453/mt, up RMB 886/mt from early September.
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