The price of monoammonium phosphate keeps rising. The mainstream quotation of 55% powdered monoammonium in Hubei area is 2050-2100 yuan (ton price, the same below). The actual acceptance of manufactured ammonium has risen to 2000-2050 yuan, while the low-end remittance of 1960 yuan in the earlier period has been heard that the low-price has not been reached recently. The actual acceptance of 58% powdered monoammonium in Hubei province is 2100 yuan in the earlier period, which has been raised to 2200 yuan in the near future; the pre-quotation of 55% powdered ammoni Fifty yuan, and no bargaining, the recent offer rose to 2050 yuan. Overall, the price of Monoammonium has been raised by 50-100 yuan recently, and the actual turnover has risen by 20-30 yuan.

Prices are likely to continue to rise in the near future, but are they really strong enough?

Firstly, enterprises are more centralized. Recently, the stocks of ammonium enterprises in Hubei, Sichuan and other places have been gradually depleted. The stocks of large factories with over 100,000 tons of pre-stock have bottomed out in the recent period. Some factories still have about 10,000 tons of orders to be issued after depletion of stocks. Recently, many large factories in Hubei, Sichuan, Anhui and other places have suspended orders. Most of the orders to be issued can be executed until the middle and early May, and the enterprises are relatively concentrated.

2. Shipment in Sichuan is blocked. Recently, we have to mention the road repairs in Guangyuan area of Sichuan Province. The road repairs make some transport vehicles need to bypass and increase the distance. It is planned to resume operation at the end of June, but the specific time is still uncertain. Road construction has led to obstruction of transportation. The areas affected include Henan, Hebei, Shanxi, Shandong, Shaanxi and other areas in Northwest China. The freight of Monoammonium has also increased relatively. For example, the freight of Sichuan in Shaanxi in the earlier period is about 100-110 yuan, the freight of Sichuan in the recent period is 130-140 yuan, the freight of Sichuan in Shanxi in the earlier period is about 120 yuan, the freight of Sichuan in Shanxi in the recent period is about 165 yuan, and the freight of Shijiazhuang in Sichuan in Hebei Province is about 220 yuan from 180 yuan. If the arrival price remains unchanged, the freight rate will rise, and the factory price will fall in disguise, which will restrain the price increase of monoammonium.

3. The demand for high phosphorus fertilizer is still early. Recently, most of the compound fertilizer enterprises purchase raw materials for summer fertilizer, and think that the price of ammonium basically touches the bottom and the risk of purchasing is not high. Therefore, the enterprise has a high enthusiasm for purchasing monoammonium. The compound mast factories in Shandong and Lianghe have about 10,000 tons of replenishment. Enterprises in Northeast, Northwest and Southwest China have also made appropriate purchases. Especially some small and medium-sized compound fertilizer enterprises without raw material stock in the early period have stopped production after resumption of production Thousands of tons of Monoammonium were purchased. It is reported that the ammonium stock of raw materials in Henan compound mast plant can be used until the middle and early June. There is no new purchasing plan in the near future. In the later period, we will consider when to re-purchase according to the market situation. However, due to the early period of July and August from high phosphorus fertilizer, it is anticipated that in the short term, there will be no relatively concentrated plan for large quantities of ammonium purchasing by various compound fertilizer enterprises.

4. Fluctuation of raw material prices. The price of sulphur began to rise around the Qingming Festival. At that time, the price of granular sulphur in ports such as the Yangtze River rose again to more than 1000 yuan, but not for a long time. Because of the excessive rise and the rapid increase, the price of sulphur began to slow down in recent days. At present, the price of granular sulphur in Yangtze River Port and Fangcheng Port is around 1100 yuan. The price of liquid ammonia has also fallen after the rise, and has recently risen again, mainly due to the improvement of factory goods and the reduction of inventory. At present, the mainstream acceptance of liquid ammonia in Hubei has risen again to more than 3000 yuan, near 3030-3100 yuan. The price of sulphuric acid varies from region to region. For example, the production and transportation of sulphuric acid in Henan and other places are blocked due to environmental protection and safety inspection. The price has already risen and has been in the recent consolidation stage. Phosphorus ore prices have fallen by about 50 yuan or more due to increased supply.

In summary, due to the low inventory and some pending implementation of the plant, the price of ammonium may continue to rise, but due to insufficient demand and long distance from high phosphorus fertilizer, there is no chance of a substantial increase in the short term.

Under the boost of various positive factors, the price of crude oil has been rising unilaterally since this year. The main contract of NYMEX crude oil futures has now stood above the $64/barrel level, with a cumulative increase of more than 40%. Analysts said that OPEC + production reduction, Venezuela’s unstable situation will continue to support oil prices, oil market is expected to continue to rise in the second quarter.

Futures prices are rising unilaterally

Since 2019, the international oil price has shown a volatile upward trend. The main contract of NYMEX crude oil futures rose from around $45 a barrel to above $64 a barrel, an increase of $19 a barrel or 42.22%.

Analysts said that the sustained rise in oil prices was mainly affected by three factors:

First, OPEC + production cuts are being promoted. In the agreement reached at the end of last year, OPEC assumed a share of 800,000 barrels per day, not 400,000 barrels per day. After three months of production reduction, although the implementation of output reduction in Russia and other countries is not ideal, OPEC’s output reduction is very ideal, the overall implementation rate of output reduction is more than 106%. Driven by production cuts, the market supply has been significantly reduced, which has supported the strength of oil prices.

Secondly, the situation in Venezuela is unstable. The United States has continued to tighten economic sanctions against Venezuela, while Venezuela’s domestic power problems have emerged in an endless stream. The interruption of electricity has plagued Venezuela’s domestic production and life, especially the transportation of crude oil ports, which has prevented the export of crude oil.

Third, the economic situation has steadily recovered. On the one hand, the international trade situation has steadily recovered. On the other hand, after the Federal Reserve suspended interest rate hikes, other central banks around the world followed the Federal Reserve’s footsteps and adopted a relaxed approach. Of course, in addition to the central bank policy, a series of measures such as the rapid arrival and landing of China’s tax reduction policy have made the global economic situation recover steadily.

Posterior market probabilities continue to rise

Despite the rebound and good continuity of oil prices, the current price of $64 per barrel is still far from the high of $77 per barrel in the third quarter of last year. Zhu Guangming believes that the overall international oil price in the second quarter will continue the warming trend in the first quarter, and US crude oil will stand at $70 per barrel, not excluding the short-term access to $75 per barrel. The specific reasons are as follows:

First of all, the driving force of production cuts is still there. In addition to Saudi Arabia’s active production cuts, Russia may accelerate the pace of production cuts in the second quarter. The convergence of market views on supply cuts was the most important driving force behind the rise in oil prices in the second quarter.

Secondly, the situation in Venezuela is still unstable, and it is difficult for the country’s crude oil production to recover significantly.

Thirdly, the U.S. plan to exempt Iran from the oil embargo is uncertain, and the scope of the exemption may be narrowed.

Finally, the extension of the agreement deserves the attention of the market. In the current relatively low oil price situation, Saudi Arabia’s target for oil price is $70 per barrel. Therefore, due to concerns about the rapid increase in U.S. crude oil production in the second half of the year, Saudi-led production reduction should be postponed smoothly, which strengthens market confidence.

Analysts also said worries about economic weakness would largely limit the rise in oil prices, but the short term may not be the main factor compared with rapid changes in the supply side. Therefore, the upward trend of oil prices in the second quarter should not change.

Since April, the domestic methanol market has performed well as the spring inspection of the plant has been carried out, the coastal inventory has gradually declined, the inland price has been firm, but the port and futures prices have declined. The feeling is that the price of the port has fallen while keeping a lot of good data. Especially now the atmosphere of short-selling in the whole market is very strong, there is a lot of methanol falling unremittingly. So, which link is the problem, or the methanol market has been “demonized”!

Data are getting better

Since April, the domestic methanol data have been significantly improved. Among them, the start-up rate of domestic methanol plant decreased from about 73% in the previous period to about 65% in this week, and the spring inspection of large-scale plants was carried out on schedule. Prices in Northwest China have remained near 2200 yuan/ton for several weeks, with a discount of 2800 yuan/ton. Inventory in Northwest China has also been gradually reduced from 260,000 tons to less than 200,000 tons, which also includes 50,000-60,000 tons of raw materials in Jiutai’s new olefin plant.

Looking from the coastal areas, the total inventory of East and South China has dropped from about 1.1 million tons in the previous period to about 930,000 tons at present. Among them, the saleable inventory of East China has dropped from about 200,000 tons in the earlier period to about 130,000 tons at present, and has restored to a reasonable level. It is not easy to obtain such data under the condition that the short-term consumption of downstream is reduced due to the explosion accident of sound water in Jiangsu area.

Careful calculation shows that in the first quarter of this year, under the background of high start-up rate of domestic methanol plants and high inventory of products, the overall inventory can still be reduced. Demand has increased by more than 8% compared with the same period last year, indicating that downstream demand is very good.

Prices in coastal areas are falling

In April, the price of methanol in the port area gradually weakened, and it has become a “depression” of domestic methanol price. As of April 16, methanol quotation in Jiangsu was 2 380 yuan/ton, down 100 yuan/ton from 2 480 yuan/ton at the beginning of this month, a decline of 4%. Futures MA1909 contract closed at 2 471 yuan/ton, down 37 yuan/ton from 2 588 yuan/ton at the beginning of this month, a decline of 1.4%. Compared with other areas in China, the price of coastal ports is on the low side. Apart from 2200 yuan/ton quoted price converted to 2800 yuan/ton in Northwest China, 2250 yuan/ton quoted price converted to 2610 yuan/ton in Hebei, 2320 yuan/ton quoted to 2520 yuan/ton in Shandong and 2250 yuan/ton quoted to 2450 yuan/ton in Henan.

Up to now, the arbitrage window in East China and other regions in China has been closed. The arbitrage window in Northwest China has been closed with East China for as long as a month, and the South-North Jiangsu region once quoted the level water with East China.

Keeping a bunch of good things but falling

At present, the market for methanol interpretation of the current and future voices are many, but it is undeniable that a bunch of good data, prices have declined. Looking at the current interpretation of the methanol market, some voices are likely to be “extreme”. For example, some people think that the large-scale maintenance in Northwest China is “hypocritical”. I can’t understand how people repair, and then I return to the inspection. Others believe that the rapid depot of ports at present is “unexpected and unsustainable”, which is not a big problem. If it is good to land, it may be better.

The expectation for the future market is that maintenance devices will be centrally opened, imports will enter in large quantities, and inventories will reach a new high. Neglected expectations are that demand will also be released centrally, supply in the Mainland will be inadequate and dependence on imports will increase.

Coastal areas need to get used to the so-called high inventory

Recalling the last time methanol appeared in coastal high inventory of 1.2 million tons, domestic methanol to olefin plants are very few, and the annual apparent consumption of methanol in China is only about 30 million tons. Now the environment is that we are in a market with an annual production and sales of 60 million tons. In coastal areas, the methanol-to-olefin unit alone needs 45-600,000 tons of standing stock of raw materials. Statistically speaking, the last time there was a high inventory in coastal areas, many reservoirs were not included in the statistical scope, so the actual inventory is larger than the 1.2 million tons. This year’s actual situation is that although the scope of statistics has been expanded, there are still many stocks that have not been entered. If not for the tight storage capacity along the coast and queuing to unload ships, the actual peak value of methanol inventory will be about 130-14 million tons. It can be said that the first quarter of methanol depot is very successful. Moreover, coastal areas should be accustomed to high inventory in the future, because downstream factories expand capacity and increase stock, if the normal inventory in coastal areas is less than 800,000 tons, there may be a situation of unavailability.

Price spreads between the Mainland and East China may be closed for a long time

Arbitrage between Northwest China and East China has been closed for one month, but the Northwest China is still in a state of de-inventory, indicating that the demand of the mainland is increasing gradually. Overall, the demand of the mainland is very strong in the first quarter. Even if the formaldehyde starts to decline, the actual production and sales are also very considerable. Taking southern Shandong-northern Jiangsu as an example, the start of plate market this year is higher than last year. The decline of formaldehyde start-up in southern Shandong-northern Jiangsu caused the price of surrounding formaldehyde to soar. Goods from Hebei, northern Shanxi and Henan flowed into the area. In fact, the consumption of formaldehyde for methanol did not decrease, but increased.

For the Mainland, there may be a long-term closure of arbitrage with East China this year, mainly due to the new demand of the Mainland. Two sets of methanol-to-olefin units totalling 1.3 million tons were opened in Northwest China. Similar units were also installed in Shandong and Anhui provinces. The digestion and regionalization of methanol will be the main trend. Then the extension radius of imported goods will be expanded. It is an indisputable fact that the demand for imported goods will increase. For now, it is expected that by November 2019, the Mainland will not be able to open an arbitrage window with East China.

At present, the profits of imports have remained negative for more than a month. It is not valid to expect that futures will be depressed and port prices will be depressed, thus causing the decline of the mainland. If this logic is implemented, only importers will be injured.

Iranian devices are “innocent”

Since October last year, the Iranian device has been a constant “talk”. As soon as the price went up, the Iranian devices went out of order, and there were unexpected turnovers, even the expectation of early repairs. When prices fell, Iranian devices were amazingly good, and there were signs of driving the devices that had not yet been built. The same source even saw a massive overhaul of Iranian installations on Monday and a concentrated restart on Thursday. Both bulls and bears will make full use of Iranian devices thousands of miles away.

Market Needs Rational View

It is undeniable that in the first quarter of this year, the stocks of all kinds of chemical products are higher than the same period in previous years, but they are not high enough to make the market “crash”. With the rising prices of raw materials such as coal and crude oil, the value of basic chemical products has been underestimated and the profits of production enterprises have shrunk seriously. The author has met the market situation when consulting the last round of methanol fell to 1800 yuan/ton. To be frank, the power coal (621, -0.40, -0.06%) at that time was around 300 yuan/ton, and crude oil was around 40 dollars/barrel. At present, we are facing 600 yuan per ton of power coal and 70 dollars per barrel of crude oil.

At this time, to squeeze the small profits of production enterprises is somewhat unhuman, in other words, the space downward is extremely limited. But some people’s logic is very strange. They think that the basic aspects of chemical products can’t work. Then they go short of the chemical products and their raw materials. But when they get empty of coal and crude oil, they get stuck and start squeezing the profits of the production enterprises. They think that the profits of enterprises are very high and the profits are not high. They think that the industry is clear. Anyway, there are reasons.

At present, the market fundamentals are improving effectively, and the decline in inventory has proved that the supply and demand structure has improved. It seems irrational to find reasons to continue short the market at this time. The market needs to be treated rationally. Both the rise and fall have their inherent logic. The author does not want the irrational rise in the third quarter of last year, nor the irrational fall in the fourth quarter of last year. It is too biased to deliberately “demonize” a certain kind of product. What hurts is the fragile market, which is the vast number of enterprises.

Recently, the China Federation of Petroleum and Chemical Industries issued a report on the economic operation of the petroleum and chemical industries from January to February. From January to February, the economic operation of the petroleum and chemical industries was generally stable. The production of oil and gas and major chemicals in China has accelerated, the market has reached a bottom and stabilized, which is better than expected; foreign trade has maintained growth; investment has rebounded rapidly and consumption has increased rapidly. However, the downward pressure of the industry’s economic operation is still great; the market differentiation is obvious, and the momentum of recovery is insufficient; the cost is high, and the benefit is declining.

Rapid growth of energy consumption

From January to February, the operating income of the petroleum and chemical industries was 1.79 trillion yuan, a slight increase of 0.1% over the previous year, accounting for 12.1% of the operating income of large-scale industries in China.

The data show that from January to February, the apparent consumption of crude oil and natural gas in China totaled 160 million tons (oil equivalent), an increase of 10.4% over the same period last year, an increase of 0.8 percentage points over the same period last year; the apparent consumption of major chemicals increased by 3.9%, an increase of 4.2 percentage points over the same period last year.

Crude oil consumption increased, while natural gas slowed down slightly. From January to February, the apparent consumption of crude oil in China was 113 million tons, an increase of 9.3% compared with the same period last year, an increase of 2.4 percentage points and an external dependence of 72.7%. The apparent consumption of natural gas was 52.35 billion cubic meters, an increase of 13.2%, a decrease of 3.6 percentage points, accounting for 29.5% of the total apparent consumption equivalent of crude oil and natural gas, and an external dependence of 45.2%. From January to February, the apparent consumption of domestic refined oil was 52.5 million tons, down 2.1% from the same period last year. Among them, the apparent consumption of diesel oil was 24.538 million tons, a decline of 7.9%; the apparent consumption of gasoline was 21.727 million tons, an increase of 4.6%; and the apparent consumption of kerosene was 6.235 million tons, an increase of 0.5%.

Import and export trade keeps growing momentum

In the first two months of this year, import and export trade in the petroleum and chemical industries maintained a momentum of growth. Customs data show that from January to February, the total import and export volume of the whole industry reached 113.19 billion US dollars, an increase of 4.1% over the same period of last year, accounting for 17.1% of the total import and export volume of the whole country. Among them, total exports amounted to 33.38 billion US dollars, an increase of 2.7%, accounting for 9.5% of the total national exports; total imports amounted to 79.8 billion US dollars, an increase of 4.7%, accounting for 25.8% of the total national imports. The trade deficit between January and February was 46.42 billion US dollars, an increase of 6.1% over the same period last year.

In February, the total import and export volume of the petroleum and chemical industries was 49.58 billion US dollars, an increase of 1.3%. Among them, exports dropped by 9.5% to $13.59 billion, while imports increased by 6.1% to $35.99 billion. The total export volume of refined oil (steam, coal and firewood) was 4.48 billion US dollars, with a growth rate of 23.5%, accounting for 13.4%; the export volume was 7.842 million tons, up 27.5%.

From January to February, China imported 81.83 million tons of crude oil, an increase of 12.2% over the same period last year; the import amount was 35.91 billion US dollars, an increase of 3.9%, accounting for 45.0% of the total import trade of the whole industry. Imports of natural gas reached 24.150 billion cubic meters, an increase of 18.1%, and imports amounted to $8.46 billion, an increase of 46.6%.

Benefits of the petroleum and chemical industries have fallen sharply

Since this year, the benefits of the petroleum and chemical industries have declined substantially. From January to February, the total profits of the whole industry amounted to 81.91 billion yuan, down 37.3% from the previous year, accounting for 11.6% of the total profits of large-scale industries in the same period. The operating income cost per 100 yuan was 82.93 yuan, up 1.86 yuan from the same period last year; the loss area of the industry was 28.9% and increased by 6.1 percentage points from the same period last year; the total assets amounted to 12.5 trillion yuan, up by 5.7%, and the asset-liability ratio was 55.43%, down by 0.12 percentage points. From January to February, the profit margin of the whole industry’s operating income was 4.58%, down 2.74 points from the same period last year; the gross profit margin was 17.07%, down 1.86 points.

Among them, the benefits of oil and natural gas exploitation industry are basically stable, and the profits decrease slightly. From January to February, 293 enterprises in the oil and gas exploitation industry achieved total profits of 25.34 billion yuan, down 2.4% from the same period last year, accounting for 30.9% of the total profits of the petroleum and chemical industries. Among them, the total profit of oil exploitation was 18.78 billion yuan, down 6.1%, while that of natural gas exploitation was 6.75 billion yuan, down 4.8%.

Downstream Pressure Initial Upstream Production and Landing

At present, with the onset of Hengli PX production capacity, the weakening of PTA cost has become a foregone conclusion. At the same time, with the increase of PTA plant maintenance and the recovery of downstream polyester demand, PTA is expected to be phased out of stock. From the current market point of view, the supply of tight long logic and cost-side weakening short logic is still in the game. At the seminar on PTA industry chain Market Analysis in the second quarter of 2019, sponsored by Futures Daily in Hangzhou and supported by Zheng Shang Suo, the “big cafe” of various related industries analyzed the trend of PTA aftermarket from the specific situation of upstream and downstream.

Downstream Polyester Pressure is Initial

“The consumption of downstream polyester has a great impact on PTA supply and demand this year. The current supply is a “clear card”, but the growth rate of demand is not clear, it has a very big impact on PTA supply and demand this year is tight or loose. Wang Guangqian, research director of Ningbo Hengyi Industrial Co., Ltd., said at the meeting that from the point of view of the textile ecological chain, the pressure of excess warp knitting supply has begun to emerge.

In fact, according to Futures Daily reporters, China’s textile industry has a high degree of export-oriented in the past few years, with a large proportion of exports. However, in the past two years, the proportion of demand has increased significantly, and the proportion of exports has gradually decreased. Among them, domestic demand mainly includes three parts: textile and clothing, home textiles and infrastructure.

“Clothing accounts for the largest proportion of domestic demand. At present, with the end of the clothing replenishment cycle, it means that the growth rate of demand for raw materials will decline steadily. Wang Guangqian said that before 2016, the apparel industry was in the stage of de-inventory. We can see that the number of physical stores of apparel enterprises has been decreasing. Since the Hangzhou G20 Summit in 2016, garment demand has increased again, and the replenishment of the storehouse in 2016-2018 has stimulated the growth of polyester consumption. Clothing replenishment cycle is about 2 years. With the end of clothing replenishment cycle, the pulling effect on polyester raw material consumption is weakened.

Home textiles are closely related to real estate. Wang Guangqian said that with the end of the super boom cycle of real estate, the growth rate of demand for raw materials for home textiles will decline substantially. “Since 2015, this super real estate cycle (improvement + speculation + hardcover) is the main force driving the outbreak of home textile market demand. However, the real estate cycle has ended in the third quarter of 2018. The demand for real estate home textiles tends to weaken after replenishing the warehouse in the third quarter of last year. Warp knitting machines are the first to feel chill. The demand for real estate home textiles in 2019 will obviously slow down, and the demand for warp knitting will be difficult to improve. This means that the growth rate of demand for raw materials for home textiles will be greatly reduced. He said.

In fact, the pressure on the weaving sector brought about by the slowdown of terminal demand will first be reflected in the production profit, and then be transmitted to its own supply and the demand for raw materials. “At present, the profits of weaving and elasticity have been damaged, and the later stage will be the transition to the contraction of the supply side. In addition, it will also affect the enthusiasm of raw material stockpiling. Wang Guangqian said at the meeting.

On the export side, Wang Guangqian said that the growth rate of textile and apparel exports in the future is expected to remain low (negative growth). After the gradual easing of Sino-US trade frictions at the end of November last year, American apparel wholesalers made use of the rare time window period to replenish their stocks. As a result, the inventory-sales ratio of American apparel wholesalers rose sharply from December last year to January this year. Domestic orders were released sharply in early January, and the end weaving was in the process of catching up with orders throughout the first quarter. The consumption level of polyester raw materials was at a high level. After the polyester festival, the construction began at a high level, and the obvious inventory pressure was still not felt. Inventory transfer from polyester to weaving, and polyester inventory pressure transfer to terminal. “In view of the disappearance of the effect of centralized export rush in the first quarter, it is expected that the export data in the second quarter will be rather bleak, or maintain a low speed or even negative growth, and textile and garment exports throughout the year will be difficult to say optimistic.” Wang Guangqian said.

“With the slowdown of terminal demand, it is expected that the new capacity of polyester production will also slow down in 2019.” Wang Guangqian said that in the first quarter of this year, the growth rate of polyester production was around 9%, which implied a large overdraft of future demand. In his view, polyester demand will not sustain this growth rate in 2019. “It is estimated that China’s polyester production will reach 48.8 million tons in 2019, with a growth rate of about 7 percent.”

“If we estimate that PTA production will increase by 3.2 million tons and polyester production will increase by 9% in 2019, September will be quickly depotted and there will be a greater risk. If estimated by 7% growth rate of polyester production and 3.2 million tons of PTA increment, the supply-demand balance sheet will maintain a relatively tight balance and accumulate again in the fourth quarter. There will be no obvious gap between supply and demand as a whole, but there will be about 1.2 million tons of end-of-term inventory by the end of the year. Wang Guangqian said that from the point of view of demand, PTA supply and demand this year may be far less tense than you think.

The change of PTA industrial chain pattern will lead to profit redistribution

Since 2019, with the production and landing of Hengli and other enterprises, PX supply has introduced new forces, and the original supply pattern of PX will change. “ACP vendors and Suppliers account for about 30% of Asia’s production capacity and more than 50% of the negotiable trade volume. They have a strong voice in the price of PX. PX producers in mainland China are highly concentrated, with only seven suppliers, and the top five Suppliers account for more than 80%. With the production of Hengli and Zhejiang Petrochemical PX, the original supplier-led PX trade market pattern will be impacted. Qin Hao, PTA sales manager of Fuzhou Chemical Trade (Zhangzhou) Co., Ltd., said at the meeting that PX in Japan, Korea and other countries has a high dependence on the Chinese market and will face the impact of the replacement of PX localization in the future, while the newly built integrated devices in China have obvious advantages in production and operation costs, consumer markets and channels.

“PTA as a downstream product of PX, PTA production capacity in the last three years has almost maintained a stable level, almost no new capacity introduced, but there will be some changes in production. Although the industry is in a capacity-free cycle from 2015 to 2017, during this period, due to the slow downstream driving, output has maintained a steady growth level. Qin Hao said that the total effective capacity of PTA according to CCF statistics is 45.78 million tons. Yisheng, Hengli and Fuhua account for more than half of the total capacity. The growth of PTA supply in the next two years is basically based on the expansion of the original suppliers, and some downstream enterprises are mainly extended upward, the concentration of the whole industry will be improved.

Qin Hao said that in the next two years, Hengli, Xinfengming, Baihong and Yisheng will be decided to put into operation, so the expansion is mainly based on the internal expansion of the industrial chain. “After this round of expansion, the vertical integration of the whole industrial chain deepens, many enterprises have a more vertical and perfect supply system from upstream to downstream, which will lead to the production capacity of PX, PTA and polyester eventually become a mutual supply system within an enterprise or a group, and the cash flow to the market will be reduced, which will weaken the liquidity of some spot in a disguised way.” Qin Hao said.

In addition, the volatility of commodity prices will also decline. “Because after vertical integration, these enterprises have good means and tools to adjust and distribute profits. If there is excess profit in one link, these enterprises will use the tools they have to adjust and distribute profits among industries. Qin Hao said at the meeting.

It is understood that PX project has a long construction cycle, a large investment scale and a high access threshold; polyester fiber project has a shorter investment construction cycle, a smaller investment scale and a better profit, polyester new capacity can reach production faster. The characteristics of industrial investment determine that there will be mismatches during the adjustment of supply and demand in the industrial chain, which will lead to uneven profits. In fact, in the PX-PTA-polyester industry chain, profit distribution is closely related to the supply and demand pattern of each link and the upstream and downstream game of the industry chain.

“In the situation of shortage of supply, PX has considerable profits, enjoys the mismatched dividend of production capacity, PX sellers have the pricing power, PTA profits are always on the profit and loss line, and the factor restricting PX price upward is that the downstream tolerance of raw material cost reaches the limit level. Since September 2018, PTA industry has improved in terms of supply and demand, PTA profits have moved as a whole, PX seized the opportunity to occupy profit space, and profit space has increased. Qin Hao said that based on the deduction results of the profit background in 2018, the situation of PTA de-inventory in 2019 is difficult to reverse, and the corresponding profit level should gradually rise. Under the background of low inventory, PTA manufacturers have strong bargaining power, grasp the initiative of profit distribution in the industrial chain, and most of the profits brought by cost collapse should fall in the PTA factory link. The same profit background deduces that in the second half of 2020, when the monthly output of PTA new devices reaches more than 400,000 tons, profits will begin to decline.

In view of the future investment opportunities of PTA, Shen Ye, senior analyst of Yongan Futures PTA, said at the meeting that although the absolute price is difficult to speculate, there are more relative price opportunities. “Overall, PTA is in the upstream and downstream capacity expansion cycle, so industry profits are expected to expand, looking forward to this year’s processing fees; monthly PTA industry attributes and contract design particularity, the superimposition of its industry environment, set as a probability event; and absolute prices, after a sharp fall in 2018, speculative demand or weakening in 2019, but due to convergence Ester and weaving are still in the capacity expansion cycle, and the replenishment cycle has not yet ended, so there is still a pulse market stage. He said.

After a decline of about 10 days on April 12, urea rose again after a decline of about 70-100 yuan/ton, which exceeded the expectations of most industry insiders. Especially, a factory in northern Jiangsu increased by 80 yuan/ton in just four days from 12 to 15. Is there any feeling similar to the last ten days in late March? Do you feel that all factors in the market are not enough to pull up?

How will the urea market end when it lags behind and rises again?

First of all, the plan can’t catch up with the change, and the market has a little variable again. The price reduction started on April 2. The urea manufacturers’surface quotation did not drop much. The actual turnover fell very fast. Some large agricultural companies were a little panicked. They still had some high-priced goods not in place. What’s more, let’s talk about selling them? Therefore, the symbolic receipt of some new orders while lowering prices has brought new support to urea manufacturers’prices. However, when the high-priced goods in the hands of large agricultural companies are digested, they may no longer take new orders and delay for a month and a half, which should bring new low prices to urea manufacturers.

Secondly, there is still support for industrial demand. The starting rate of compound fertilizer enterprises has risen rapidly. On the one hand, through the increase of urea price in more than a month, especially in Nabor in late March, the compound fertilizer enterprises have increased their sales promotion or continued to sell at a low price. The stock of finished products in their hands has been digested a little faster. In the last wave of spring market, the more production points are a little bit, the more sales points are a little bit, win-win with urea manufacturers, and give urea manufacturers this. The second price increase brought necessary conditions. However, fertilizer production in spring is the end after all. Fertilizer production in summer is a little early. Industrial compound fertilizer enterprises, power plants and plywood factories temporarily digest the previous products and raw materials. Compound fertilizer enterprises should not blindly accept high-price urea. Moreover, some compound fertilizer enterprises will soon convert to high-phosphorus and high-potassium fertilizer, and will not blindly support urea price increase.

Thirdly, there are slightly optimistic expectations in terms of exports and imports. International urea prices have risen for two weeks in succession, although the increase is not significant, but it gives some confidence to Chinese urea manufacturers. Industry insiders also realize that the impact of imported urea is not significant. The imported Iranian urea that arrived at Zhenjiang Port on April 9 is still not much news. The panic of small and medium-sized distributors, or the psychology of early selling, is not so strong. The next importers of urea arrived in Hong Kong in May or even June, so there is no need to pay attention to it for the time being. India won only 372,000 tons of urea in the tender on April 3. New tender may be held at the end of April and May. At that time, the international urea price or another step may bring some opportunities for China’s urea export. Even if it cannot be exported, it can avoid the excessive amount of imported urea flowing into China’s market.

Finally, the psychological tug-of-war between buyers and sellers is temporarily dominated by sellers, or the one with sufficient funds. Although the urea start-up rate is high, it does not affect the market quickly. Although the urea manufacturers’price is 200-300 yuan/ton higher than the cost line, it also fails to prevent speculation among some professionals. This price increase is nothing more than once again confusing everyone’s vision, building up everyone’s psychological bottom price, so that a small number of people in need once again bear high prices.

In short, the positive factors are too difficult to find, the price increase is very delicate!

To sum up, we should continue to adhere to the original point of view. Without the intervention of policy or unexpected factors, the ex-factory price of urea is still reasonable at the price of 1800-1900 yuan/ton, and it will climb another 100-200 yuan/ton during the peak period of summer market. Ten thousand steps back, if prices continue to rise for a period of time, it will be too late to take urea for the end fertilizer demand in June, let alone for the more concentrated demand for urea in topdressing is still early. Recently, we need to observe the trend of urea prices more before making purchasing decisions. A good result can be achieved only when the purchase is made in good time.

On April 14, the phthalic anhydride commodity index was 64.72, unchanged from yesterday, down 46.13% from the peak of 120.13 points in the cycle (2012-02-28), and up 33.66% from the low of 48.42 points on January 21, 2016. (Note: Period refers to 2011-09-01 to date).

Recent domestic market price trend of phthalic anhydride has declined slightly, the market of phthalic anhydride and phthalic anhydride in eastern China has weakened, downstream factories have just needed to purchase, factory inventory pressure has continued, high-end transactions have been blocked, the mainstream of on-site neighbouring source negotiations is 6500-6600 yuan/ton, and the mainstream of naphthalene source negotiations is 6300 yuan/ton; the mainstream quotation of phthalic anhydride market in North China is 6400-6600 yuan/ton, with the main market weakness The quotation trend of enterprises has slightly declined, downstream construction is not high, purchase on demand is the main, wait-and-see mentality is strong, domestic phthalic anhydride plant operation is stable, phthalic anhydride spot supply is normal, the market is not good, phthalic anhydride prices continue to decline.

Recently, the executive price of the upstream product of phthalic anhydride, Sinopec o-phthalic anhydride, is 6700 yuan/ton. The actual transaction price in the market is 6700 yuan/ton. The quotation is stable and the port market is general. The upstream raw material mixed xylene price is stable, the turnover of phthalic anhydride is general, the stock of phthalic anhydride in port is low, the price of phthalic anhydride is temporarily stable, the cost of imported phthalic anhydride is rising, the actual transaction price is discussed in detail, the upstream price trend is stable, and the market price of phthalic anhydride remains weak. DOP prices in the downstream are lower. Recently, in the DOP market in Zhejiang, merchants’quotations have maintained 8200-8300 yuan/ton, while downstream prices have slightly declined. Demand for upstream phthalic anhydride is limited, and the market price of phthalic anhydride is slightly lower. It is expected that the market price of phthalic anhydride in the later period will be around 6550 yuan/ton.

On April 14, the PX Commodity Index was 67.20, unchanged from yesterday, down 34.38% from its peak of 102.40 points in the cycle (2013-02-28), and up 47.53% from its low of 45.55 points on February 15, 2016. (Note: Period refers to 2013-02-01 to date).

Recently, the domestic market price trend of p-xylene has been temporarily stable. Pengzhou Petrochemical Plant has been running steadily in the field. Urumqi Petrochemical Plant has started 50% of its operation. Fuhai Aromatic Hydrocarbon Plant has started a line. CNOOC Huizhou Refinery and Chemical Plant has been overhauled. Hengli Petrochemical PX Plant has been put into operation. Other units have been running steadily for the time being. Due to the increase of domestic market supply of p-xylene, the market for p-xylene has increased. Price trend is stable for the time being. The opening rate of PX plant in Asia is about 80%. On April 12, the closing price of p-xylene in Asia increased by 3 US dollars/ton. The closing price is 1049-1051 US dollars/ton FOB in Korea and 106 8-1070 US dollars/ton CFR in China. More than 50% of the domestic units need to be imported. The rise of foreign prices has a positive impact on the domestic market price of p-xylene. The price trend of p-xylene in the market is temporarily stable.

On April 12, the price of WTI crude oil in May rose to $63.89 per barrel, an increase of $0.31. Brent crude oil in June rose to $71.55 per barrel, an increase of $0.72. The trend of crude oil price rose slightly, which provided some cost support for the price of downstream petrochemical products. The price trend of paraxylene market was temporarily stable. Recent textile industry market shocks, PTA price trend shocks on the 15th day, the average price of East China bid in the vicinity of 6700-6800 yuan/ton, as of 12 days domestic PTA start-up rate is about 80%, polyester industry start-up rate is about 90%, downstream production and sales rate maintained high, but PTA market price changes little, it is expected that PX market prices will remain stable in the later period.

After entering April, urea prices in the Central Plains have been adjusted appropriately with the decrease of demand and the increase of supply. Recently, urea factory prices in Lianghe and other places have dropped below 2000 yuan (ton price, the same below). It is rumored that Shanxi’s low price transaction has dropped to a little higher than 1900 yuan, but the overall receiving prices in the Northwest, Southwest and Northeast regions are slightly higher than those in the earlier period. There has been an increase, such as the quotation of some factories in Xinjiang has been screamed to more than 1800 yuan, the export price of high-end brands in Yunnan has also been more than 2200 yuan, and the arrival price of Heilongjiang market has also risen to more than 2200 yuan. At present, the urea market demand around the Central Plains has come to an end, but the domestic demand in some regions still exists, and prices are staggered. The downstream traders also have some difficulties in purchasing urea: are they picking up or temporarily on the sidelines? The author discusses this issue with the industry and draws the following conclusions: urea still has a certain risk of slipping in the near future, and procurement still needs to be cautious, mainly in the following aspects:

Firstly, the overall operation of the enterprise is relatively high. Recently, with the gradual resumption of production of gas head urea enterprises, although some enterprises have also entered the state of overhaul, according to the statistics of China Chemical Fertilizer Network, the actual daily output of urea in China is still more than 150,000 tons, and some overhaul enterprises are about to resume production, while most large plants have no plan for overhaul, the overall supply pressure is gradually increasing, and some industries are expected to be around the end of April, urea Overall supply may exceed 160,000 tons, and historical data over the years show that when the overall production of urea exceeds 155,000 tons, the overall price is relatively likely to decline.

Secondly, the market demand is not urgent. Recent spring market orders are almost at the end. Although the summer fertilizer market mainly uses high nitrogen fertilizer, most downstream compound fertilizer plants are not in a hurry to purchase at present. On the one hand, there are still low-price orders to be issued in the early stage. Compound fertilizer enterprises are not short of stock in the short term. On the other hand, the current urea price is still on the high side. In order to avoid risks, some enterprises are still offering high prices. The urea industry only takes a stand-by attitude, waiting for the urea market to stabilize; and the export side is because the domestic price is relatively high, at least at this stage, the domestic urea export is temporarily hopeless, under the background of high start-up rate, urea price or there is a certain risk of decline.

In addition, the demand of plywood factories and recent markets in northeast, northwest and southwest can not last long. The agricultural market will end before May, and the demand of plywood factories is out of gear. Some industries are expected to be the most prosperous when the enterprises have completed the execution of the orders in arrears, the price will decline further.

In summary, recent urea demand reflects slightly. Although some factories have done enough to meet the tense demand atmosphere, the downstream market is still relatively small. It is expected that the overall price of urea in the near future is stable and weak, and there is still a certain downside risk.