China Alkylate Market Performed Well in Q4, 2020
In Q1, 2020, China’s alkylate prices crashed, those fluctuated frequently within a narrow range in Q2 and Q3, 2020. However, in Q4, 2020, China’s alkylate prices went up from November and surpassed RMB 4,000/mt. According to SCI’s statistics, the highest average price reached RMB 4,300/mt. On the one hand, the demand for alkylate improved as state-owned refineries purchased more gasoline resources from the market. Moreover, supported by the rising LPG prices, the cost of alkylate hovered at a high level, giving support to China’s alkylate market.
Entering January 2021, SCI reckons that China’s alkylate prices will fluctuate downward, and reasons are as follows:
First, with the increment in C4R2 prices, the profits from alkylate production become negative, and it is tough for alkylate producers to purchase feedstock. Accordingly, it is estimated that operating rates of alkylation units will decline, weighing down the overall alkylate supply. Meanwhile, the consumption of gasoline slows down, so the demand for alkylate will weaken. Therefore, it is estimated that the supply-demand fundamentals of China’s alkylate market will underperform in January 2021.
