CPL spot trading becomes more important in 2023

First of all, spot transactions have drawn significantly increasing attention of the market, since starting 2023 part of contract buyers switch to secure cargoes from the spot, and some CPL suppliers (other than Sinopec and Nanjing Fibrant) changed their contract pricing basis from the Sinopec's settlement to the monthly average spot price. In addition, some of the integrated enterprises that used to be CPL sellers have also joined CPL procurement group this year, which can indeed play a role in accelerating price increase in some stages where the rising situation is more established.

The product characteristics of low storage capacity and low inventory determine that the supply and demand of CPL has always been very delicate, and the relationship between supply and demand is often changed by one or two orders and one or two sets of devices. In a poor market environment, prices may fall even if the CPL plants have no stock and downstream either have not replenished stocks. This has been common in 2022, which is why spot goods are so popular in East China. In addition, CPL transactions are simple and lack of traders, so the advantageous side, upstream or downstream, are easy to manipulate the market.