Recently, the price of rare earth in China has remained stable, and the market price of some light rare earth has increased slightly. The price trend of some rare earth products in China is shown as follows:

Recently, the price trend of heavy rare earth market in China is stable, as of the 16th, the price of dysprosium oxide is 1.7 million yuan / ton; the price of dysprosium ferroalloy is 1.685 million yuan / ton; the price of some light rare earth market in China is also rising, the price of neodymium oxide as of the 16th is 292000 yuan / ton, the price trend is stable; the price of praseodymium neodymium alloy is 358000 yuan / ton, the price trend is stable; the price of praseodymium neodymium neodymium oxide is 279000 yuan/ The price of neodymium increased by 500 yuan / ton to 367500 yuan / ton. In recent years, the price trend of heavy rare earth in China has been stable, and some prices in light rare earth market have risen. Affected by favorable national policies, the domestic rare earth market has maintained a high level.

On January 15, the rare earth index was 338, unchanged from yesterday, 66.20% lower than the cycle’s highest point of 1000 (2011-12-06), and 24.72% higher than the lowest point of 271 on September 13, 2015. (Note: cycle refers to 2011-12-01 to now).
Recently, the price of rare earth in the market has risen sharply. The supply policy of domestic market of heavy rare earth has improved. The domestic market of heavy rare earth is very good. In addition, the demand for permanent magnet has increased recently, the market trend of praseodymium and neodymium series products has rebounded, the on-site supply is normal, the demand for light rare earth in the near future is general, and the market price has not increased much. The price fluctuation of rare earth market is related to the national environmental protection supervision. Rare earth production has particularity, especially some products have radiation hazards, which makes the environmental protection supervision more strict. Under the strict inspection of environmental protection, the manufacturer reasonably controls the sales, but the downstream demand has not changed much in the near future, and the price trend of most rare earths is mainly stable.

In November 2018, Geng Shuang, spokesman of the Ministry of foreign affairs, said that China is the world’s largest country in rare earth reserves and production, and plays an important role in the global rare earth industry chain. China has been adhering to the principle of openness, coordination and sharing, promoting the development of domestic rare earth industry, and is willing to meet the legitimate needs of the development of all countries in the world with rare earth resources and products, so as to promote China’s economy And the development of the world economy. China’s rare earth production accounts for 73% of the world’s total, ranking first in the world and playing an important role in the game between big countries. Rare earth PR nd and Dy TB are mainly used in NdFeB magnetic steel. Recently, the Ministry of industry and information technology and the Ministry of natural resources jointly issued a notice to release the total amount control indicators of rare earth mining and smelting separation and tungsten mining in 2019. The Ministry of industry and information technology of China announced that the total amount of rare earth mining and smelting separation in 2019 was 132000 tons and 127000 tons respectively, while the quota of rare earth mining in 2018 was 120000 tons, an increase of 12000 tons, and the data in 2019 It’s the highest year since 2014. In addition, the Ministry of industry and information technology, together with relevant departments, drafted the development plan of new energy vehicle industry (2021-2035). After 15 years of continuous efforts, China’s core technology of new energy vehicles will reach the international leading level. By 2025, the proportion of new energy vehicle sales will reach about 25%. Driven by national policies, the supply and demand pattern of rare earth industry is expected to further improve, and China’s domestic demand is expected to further improve The price of rare earth in the domestic market remained high and volatile.

Rare earth analysts of business agency expect that the recent domestic environmental protection scrutiny will not be reduced, coupled with favorable domestic support for the export of rare earth industry, and the supply and demand pattern is improving in a good way. It is expected that the price of heavy rare earth in the rare earth market will remain high after the Spring Festival, and the trend of light rare earth market will be improved.

On January 16, the hydrogen peroxide commodity index was 122.83, unchanged from yesterday, down 43.39% from 216.98 (2017-12-24), the highest point in the cycle, and up 71.22% from 71.74, the lowest point on August 3, 2016. (Note: cycle refers to 2011-09-01 to now)

According to the monitoring of the business agency: after the new year’s day, hydrogen peroxide ushered in a wave of rising trend. Due to the poor demand, the price of hydrogen peroxide has been callback after the rise. As of January 16, the average price of hydrogen peroxide was 1130 yuan / ton, down 0.88% from the beginning of the week and up 2.11% from the beginning of the month.

market analysis

In January, the price of hydrogen peroxide terminal hexanoyl increased, and the enthusiasm for purchasing hydrogen peroxide increased. In addition, some hydrogen peroxide manufacturers shut down, and the manufacturers raised their prices for sales. The price of hydrogen peroxide increased by more than 5 points. With the Spring Festival approaching, the terminal demand will fall, and after the surge of hydrogen peroxide, there will be a callback. The market of hydrogen peroxide in Shandong and Anhui is relatively stable, and the price of hydrogen peroxide in Hebei continues to fall.

As of January 16, the quotation of hydrogen peroxide in each region is as follows:

Shandong: Luxi Chemical 27.5% hydrogen peroxide 1090 yuan / ton; the price is 20 yuan / ton higher than the beginning of January.

Hebei Province: the ex factory price of 27.5% hydrogen peroxide in Zhengyuan fertilizer industry fell to 1000 yuan / ton, 120 yuan / ton lower than that in early January.

Anhui Province: the price of 27.5% hydrogen peroxide in Quansheng, Anhui Province is 1300 yuan / ton, 100 yuan / ton higher than that in early January.

Hunan Province: the price of 27.5% hydrogen peroxide in Hunan Shuangyang is 1250 yuan / ton, the same as that in early January.

Zhejiang: Hangzhou Mingxin 27.5% hydrogen peroxide quoted price is 1200 yuan / ton, the price is the same as that in early January.

Industry chain: the price of caprolactam at the end of hydrogen peroxide continues to decline in a weak way. The paper and textile printing enterprises have been shut down for holidays in succession. The purchase of hydrogen peroxide is less, the demand is greatly reduced, the price of hydrogen peroxide is weak, the inventory of production enterprises in some regions is low, and the price of hydrogen peroxide in other enterprises continues to decline in a weak way.

Outlook for the future

Hydrogen peroxide analysts of the business club believe that: the Spring Festival is coming, there is basically no market for hydrogen peroxide before the festival, and it is mainly weak and stable. In the short term after the festival, the price of hydrogen peroxide is still difficult to rise.

On January 13, China Petroleum Group Institute of economics and technology, a national high-end think tank, held a press conference on the development report of domestic and foreign oil and gas industries in 2019 in Beijing. According to the report, in 2019, the total refining capacity will rise to 860 million tons / year, while the total ethylene capacity will break through 30 million tons / year for the first time, and the excess refining capacity will become increasingly fierce. According to the current projects under construction and approved for construction and planning, China’s refining capacity will rise to 1.02 billion tons / year in 2025, and its ethylene capacity will exceed 50 million tons / year, ranking first in the world in terms of both surpassing the United States.

Based on the comprehensive analysis of the development mode of oil and gas industry at home and abroad in 2019, the report considers that there are several characteristics:

domestic

Domestic oil production has stopped falling and picked up, and the rapid increase of oil and gas dependence on foreign countries has been curbed. The situation of domestic exploration and development has improved. In 2019, crude oil production reversed its downward trend for several consecutive years, reaching 191 million tons, an increase of 1.1%; natural gas production is estimated to reach 173.8 billion cubic meters, an increase of 9.8%. Although domestic oil and gas dependence on foreign countries is still rising, the momentum of rapid increase has been curbed.

The domestic oil and gas production is expected to reach 194 million tons and 190 billion cubic meters respectively in 2020. In addition, with the implementation of the national policy of developing clean coal, replacing oil with more energy, and increasing the proportion of terminal power consumption, the external dependence of oil and gas will increase steadily and slowly.

China’s refined oil consumption has entered the stage of medium and low-speed growth, and the pressure of refined oil export continues to increase. In 2019, the dependence of crude oil and oil on foreign countries will double to 70%. The growth rate of domestic consumption of gasoline, diesel and coal products will slow down for various reasons, and the pressure on the export of oil products will increase. In 2020, it is expected that the growth rate of domestic refined oil demand will continue to slow down, the refining capacity will continue to increase, the supply will continue to be surplus, and the net export of refined oil may exceed 60 million tons, surpassing South Korea to become the largest exporter of refined oil in the Asia Pacific region.

New progress has been made in the construction of natural gas production, supply, storage and marketing system. In 2019, the growth rate of China’s natural gas production was 9.6%, exceeding the growth rate of import, and the degree of foreign dependence was basically the same as that of the previous year. Significant progress has been made in China’s key projects of natural gas infrastructure interconnection, LNG receiving capacity and peak shaving capacity of gas storage. The market-oriented reform of natural gas has been steadily promoted, and the capacity of domestic natural gas safety and supply assurance has been significantly improved. In 2020 and later, with the expansion of China’s natural gas market and the continuous improvement of the degree of marketization, the construction of natural gas production, supply, storage and marketing system still needs to be continuously improved to further improve the efficiency of resource allocation and supply guarantee capacity.

The excess refining energy tends to be heavy and has the potential to expand to the low-end downstream of refining and chemical integration. In 2019, the total refining capacity will rise to 860 million tons / year, and the total ethylene capacity will break through 30 million tons / year for the first time. The excess refining capacity will become more and more severe. According to the current projects under construction and approved for construction and planning, China’s refining capacity will rise to 1.02 billion tons / year in 2025, and its ethylene capacity will exceed 50 million tons / year, ranking first in the world in terms of both surpassing the United States.

Strategic breakthroughs have been made in international oil and gas cooperation. In 2019, the natural gas pipeline of China Russia east line will take five years to complete and ventilate, and the natural gas from Russia will connect with the main consumer market of Northeast China, Beijing Tianjin Hebei and Yangtze River Delta; Sinopec, Guanghui energy, new Austria energy and other enterprises will sign a number of long-term LNG supply contracts. The main consumption market of natural gas in the east of China has formed a multi source competition pattern.

The market-oriented reform process of the oil and gas industry has been significantly accelerated. In 2019, the government departments issued a number of policies around the implementation of several opinions on deepening the reform of the oil and gas system to promote the full opening of the oil and gas industry. At the same time, we will comprehensively promote the competitive transfer of mining rights; reform the operation mechanism of oil and gas pipeline network, control the two ends of the middle and open up, deepen the reform of oil and gas price formation mechanism, and strengthen market supervision. The reform of oil and gas industry system and mechanism has broken the original industry barriers, and the implementation of the new policy will further promote the process of marketization.

international

Exerting influence on the global oil and gas market has become an important starting point for the us to carry out the strategy of “US priority”. With the help of energy independence, the United States has strengthened its control and influence over the global oil market. OPEC’s internal cohesion and overall influence declined, and Qatar and Ecuador withdrew successively. Considering comprehensively, although geopolitical factors may lead to short-term and local supply tension and induce price fluctuations, the supply and demand fundamentals do not support the obvious rise of international oil prices.

Global natural gas supply and demand continue to ease. In 2019, the global natural gas trade grew by 9.1%, basically the same as the previous year, and the LNG trade grew by 12.2%, close to twice the growth rate of pipeline gas trade. The linkage of Eurasian market is prominent, and the European NBP price and the Asian LNG spot average price have all declined by about 40%. It is expected that in 2020, global natural gas supply and demand will continue to be relaxed, prices will remain low, and the game between supply and demand sides, traditional and emerging countries will continue to intensify.

The report predicts that in 2020, the global economic trend will remain weak, and the international oil price will maintain a volatile trend. The average Brent crude oil price range is 60-65 USD / barrel. For the unstable global macroeconomic and political situation, especially the trade disputes between the United States and major economies, and the greater uncertainty of the geopolitical situation in the Middle East, it is also possible that the average annual level of international oil prices will fall below 50 US dollars per barrel or rise above 75 US dollars per barrel.

1、 Acrylic price trend:

(Figure: p-value curve of acrylic acid product source: Commodity analysis system of Business Club)

2、 Market analysis:

On January 15, acrylic acid market was stable. The average price of acrylic acid enterprises as of January 15 was 8200 yuan / ton, which was the same as yesterday, down 3.53% compared with the same period last year, according to the bulk list of business agencies. On the 15th, the main price of acrylic acid in China was around 7500-9300 yuan / ton. On January 15, the acrylic commodity index was 41.12, unchanged from yesterday, 58.88% lower than the cycle’s highest point of 100.00 (2011-09-01), and 67.36% higher than the lowest point of 24.57 on November 26, 2015. (Note: cycle refers to 2011-09-01 till now) at present, the price of acrylic acid of Shandong Yukang Chemical Co., Ltd. is temporarily stable, with 7600 yuan / ton of common acid and 8100 yuan / ton of refined acid. The specific transaction price is discussed in a single way. The price of acrylic acid of Wanhua Chemical Petrochemical Co., Ltd. is stable, mainly for contracts and stable customers. At present, the price of acrylic acid is 7800 yuan / ton.

3、 Future forecast:

Analysts of acrylic acid business association believe that the price of raw material propylene rose to a high level recently, with strong cost support. Before the downstream Festival, the atmosphere of goods preparation was active, the actual orders were increased, and the market trading was good. It is expected that in the short term, acrylic acid market will be dominated by high and strong operation, and more attention should be paid to upstream and downstream and mainstream market conditions.

1、 Trend analysis

According to the nickel price monitoring of the business association, on January 15, the spot nickel price fell slightly, with a quotation of 111141.67 yuan / ton, down 1.89% from the previous day, up 20.33% year on year. Shanghai nickel opened at 109140 yuan, followed by a narrow range of price fluctuations, closing at 109140 yuan, up 0.22%.

2、 Market analysis

LUNI nickel inventory rose to a nine month high and closed down 1.52% overnight in a weak shock. On the supply side, the Philippines, New Caledonia and Guatemala will play an alternative role in nickel import, but they cannot fully meet the demand. In terms of demand, the domestic downstream procurement is becoming increasingly light, the consumption of stainless steel at the end of the year is light, and some steel plants and ferronickel plants reduce production and overhaul. Indonesia’s early ore ban has changed the supply pattern of nickel market, and domestic ferronickel production capacity has shifted to Indonesia.

3、 Future prospects

Future forecast: the Spring Festival is approaching, there is no obvious demand release in the downstream, there are also less inquirers, supply and demand are weak, and nickel is expected to maintain a weak trend in the short term.

Can rely on 6645 yuan / ton of rebound high point test empty

With the recovery of calcium carbide supply after the Spring Festival and the transformation of market supply and demand pattern, PVC may continue the trend of recent correction.

Limited cost support

At the end of each year, due to the rainy and snowy weather in Northwest China and the shortage of transportation capacity before the Spring Festival, there will be structural shortage of calcium carbide supply. This year is no exception. Due to the heavy snow in many places in the north, the road transportation is not smooth, and the delivery of calcium carbide production enterprises is not smooth. In this case, the raw material supply of PVC production enterprises with calcium carbide method is tight, and enterprises start to plunder raw materials, and the price of calcium carbide has rebounded sharply in the near future.

At present, due to the rising price of cost end, the profit of PVC by calcium carbide method and ethylene method has been compressed, and the supporting effect of cost end on PVC has begun to appear. Before February, the market capacity tension and weather factors are difficult to ease, and the strong pattern of calcium carbide price is expected to continue. However, the shortage of calcium carbide supply is only structural. At present, calcium carbide enterprises show a trend of accumulation. With the recovery of transportation capacity after the Spring Festival, this part of inventory will be put on the market, the price of calcium carbide will fall, and the supporting effect of cost on PVC will also be weakened.

Abundant market supply

As of the week of January 12, the starting load of domestic PVC production enterprises was 81.89%, down 0.98% month on month, up 0.72% year on year. Among them, the starting load of PVC production enterprises with calcium carbide method is 82.45%, down 1.09% on a month on month basis; the starting load of PVC production enterprises with ethylene method is 79.27%, up 1.69% on a month on month basis. At present, there are only a few devices in China that have been shut down for a long time due to faults, and only a few of them have been overhauled or their load has been reduced. Among them, the starting load of 400000 ton unit in Inner Mongolia Sanlian is 50%, that of 300000 ton ethylene process unit in Salt Lake magnesium industry is temporarily stopped, that of 500000 ton calcium carbide process unit is 50%, that of 120000 ton unit in Qingsong Jianhua is 70%, and that of 80000 ton unit in Chengdu Huarong is overhauled to the beginning of February. The overall starting load of domestic PVC production enterprises is on the high side, and the market supply is relatively abundant. After the Spring Festival, with the reduction of environmental protection pressure, some limited devices will resume production and increase load, and the market supply will further increase.

Weak market demand

In terms of demand, near the end of the year, downstream pipe and profile enterprises shut down in a large area. In addition, it is the low consumption season in the downstream. Downstream enterprises are pessimistic about PVC market, so the market stock strength is limited. Downstream enterprises are more focused on purchasing just needed or digesting their own inventory. Not only that, due to the limit of collection before, some downstream enterprises suspended accepting orders, and consumption further weakened.

In terms of inventory, although the inventory of PVC has increased recently, it has decreased significantly compared with the same period last year, which shows that the inventory removal of PVC in the middle of last year is relatively strong, which objectively supports the price of PVC. However, if the supply and demand of PVC is still in the current situation after the Spring Festival, then the inventory or enter the accumulation cycle, which will suppress the price of PVC.

To sum up, PVC prices rebounded to an important pressure level supported by rising costs and low inventories. But we think that the price rise of calcium carbide is caused by poor transportation. With the recovery of transportation capacity after the Spring Festival, the cost support for PVC will be weakened. At the same time, at present, the starting load of PVC enterprises is on the high level, while the downstream consumption performance is relatively weak. In this case, the overall market supply exceeds demand pattern will be formed, and PVC inventory will gradually rise. Based on the above judgment, we believe that the probability of PVC price falling in the later period is relatively large, and we can rely on the rebound high of 6645 yuan / ton for short test, and the first target is near the 60 day average.

As the Lunar New Year approaches, overall demand in the Asian plasticizer market is likely to slow. There are three reasons:

1. Buyers remain cautious

2. Cost pressure on manufacturers remains

3. The seller hopes for the demand after the festival

On the other hand, due to the recent rising trend of raw material prices, with the rising cost, it is unlikely that manufacturers will make the goods cheaper at this juncture.

The price of upstream propylene and 2-ethylhexanol (2-EH) is stronger, because some producers reduce production, while others seriously consider reducing operating rate, leading to tight supply.

Most parts of Northeast Asia and Southeast Asia are celebrating the lunar new year. January 25 is the lunar new year. From January 24, China will have a full week off.

Buyers of plasticizers can take advantage of the long holiday as an opportunity to further study the market. The purchase is still cautious, the demand has not increased significantly, and the downstream demand after the festival is uncertain.

After the festival, some buyers may find that their inventory is low, and some manufacturers may hold more goods, because the Northeast Asia plant has no planned outage.

Investors have turned to look at the price trend of previous years to find some clues about the market trend.

For dioctyl phthalate (DOP), spot prices in East Asia after the lunar new year have been rising since 2017, although the increase in 2019 is relatively small.

According to ICIS data, on January 9, 2020, the average spot price of DOP was assessed as $940 / T CFR East Asia, up $5 / T from the previous week.

1、 Price trend:

On January 11, crude benzene commodity index was 74.72, unchanged from yesterday, down 43.33% from 131.84 (2013-01-28), the highest point in the cycle, and up 90.37% from 39.25, the lowest point on December 22, 2014. (Note: cycle refers to 2011-09-01 to now).

2、 Market analysis:

This week (1.06-11.10) the domestic crude benzene market was raised. The average market price at the beginning of the week was 4735 yuan / ton, and at the end of the week was 4771.67 yuan / ton, up 0.77%.

Domestic market: this week’s pure benzene port inventory slightly lower than last week. At the beginning of the week, affected by the situation in the Middle East, the oil price soared, driving the price of pure benzene to rise in the external market and the domestic market to rise. Crude benzene rose to 4650-4700 yuan / ton as of Friday, up 50 yuan / ton compared with last week. In the near future, the downstream hydrogenated benzene enterprises have started relatively stable operation, with the operating rate slightly increased to about 60%, and the demand for crude benzene is stable.

Industry chain: this week’s oil price shows a parabola trend, which goes down for four consecutive days after Monday’s big rise. Earlier this week, oil prices rose as concerns about the supply or decline of crude oil increased as tensions in the Middle East escalated last week. Later, oil prices fell sharply due to an unexpected increase in US crude oil inventories and signs of easing in the Middle East. WTI fell by 6.1% and Brent by 2.8% compared with January 3; pure benzene: Port inventory of pure benzene decreased slightly this week compared with last week. Affected by the situation in the Middle East at the beginning of the week, oil prices soared, driving the price of pure benzene up in the external market and the domestic market. However, in the later period, the oil price plummeted and the support surface weakened. In addition, the downstream trading has been light and the profit is insufficient, so the market fell back. Downstream: this week, styrene market is in a narrow range of volatility consolidation trend. The arrival of styrene in the main port increased. Generally speaking, the styrene market was forced to stay short this week, with a trading deadlock, up 1.17% compared with last Friday. In the lower reaches of Shandong Province, aniline enterprises competed for shipment, and Jinling reduced 100 yuan / ton, or 0.52%. The upstream pure benzene price is still high, the downstream demand is light, and the profits of aniline enterprises are in deficit.

3、 Trend Forecast:

At present, the external market of pure benzene has a limited boost, crude oil returns to the previous level, the follow-up direction is unclear, the winter transportation is more difficult, the north is snowy, the transportation is limited, the North resources are difficult to enter East China for arbitrage, the freight price increases and other adverse factors are more, the downstream demand of crude benzene is stable, the crude benzene market before the budget savings is mainly consolidated, and it is difficult to have large fluctuations.

1、 Price trend

According to the monitoring data of the business agency, the market price of ammonium sulfate rose slightly this week. At the beginning of the week, the average ex factory price of ammonium sulfate in China was 556 yuan / ton, while at the end of the week, the average ex factory price was 566 yuan / ton, with a price increase of 1.8%. So far, the ammonium sulfate commodity index on January 14 is 47.28, down 0.14 points from yesterday, 55.51% from the highest point 106.28 (2012-05-24), and 29.00% higher than the lowest point 36.65 on June 23, 2014. (Note: cycle refers to 2011-09-01 to now)

2、 Market analysis

Product: in recent years, the regional difference of coking grade ammonium sulphate is obvious in China, and the price has gone up and down. The price of domestic ammonium sulfate is weak and stable. The main quotation of ammonium sulfate in Central China is about 450-650 yuan / ton, that in Henan is 420-650 yuan / ton, that in Hebei is 480-750 yuan / ton, that in East China is 450-680 yuan, that in North China is 420-650 yuan / ton, and that in Northeast China is 450-650 yuan / ton.

Industry chain: the market of downstream compound fertilizer enterprises is weak, the quotation is stable, and some enterprises adjust slightly, focusing on early orders. The downstream purchases on demand and orders in the early stage. The enthusiasm for replenishment is not high. In some areas, transportation is blocked due to snowfall weather, and goods are moving slowly. The compound fertilizer enterprises are in a weak consolidation stage.

Industry: according to the price monitoring of the business agency, in the first week of 2020 (1.6-1.10), there are 27 kinds of commodities rising month by month in the list of commodity prices in the chemical industry sector, among which there are 3 kinds of commodities rising by more than 5%, accounting for 3.5% of the number of commodities monitored in the sector; the top 3 commodities are bisphenol A (9.65%), glycol (7.92%), ammonium chloride (5.09%). There are 18 kinds of commodities falling on a month on month basis, and 1 kind of commodities falling by more than 5%, accounting for 1.2% of the number of commodities monitored in this sector; the top three products falling are caustic soda (- 5.22%), chloroform (- 4.55%), sodium metabisulfite (- 3.79%). This week’s average was 0.35%.

3、 Future forecast

According to analysts of ammonium sulphate of business association, although the domestic market has increased the inquiry of ammonium sulphate, the actual operation is general, and the industry mostly takes a wait-and-see attitude. The price of domestic ammonium sulfate manufacturers is firm, and the price of coking grade fluctuates slightly. It is expected that the price of ammonium sulfate in the later period will be mainly weak and volatile, and the market before the festival will not be favorable, so it is suggested to be cautious.

At present, the main contract price of styrene futures fluctuates in a narrow range of 7300-7500 yuan / ton for more than one month. Recently, under the influence of the escalation of tensions in the Middle East, although the main contract price rebounded, it still failed to break through this operating range. Looking forward to the future, the contradiction between supply and demand of styrene still exists, and the period price may be dominated by weak operation.

Limited impact of us Iraq incident

On January 3, the United States carried out an air raid on Baghdad International Airport, killing major general Sulaimani of the Islamic Revolutionary Guard. Tensions in the Middle East escalated rapidly, international oil prices soared, and styrene rebounded. On the morning of January 8, Beijing time, the U.S. Air Force Base in Iraq was attacked by rockets, and the energy and chemical sector rose again rapidly. The tense situation in the Middle East stimulated the sharp rise of crude oil, which to some extent pushed up the cost of styrene. However, as the proportion of styrene imported directly from Iran is less than 3%, its direct impact on domestic styrene supply is limited. And trump said the United States will impose new economic sanctions on Iran, but is willing to cooperate with Iran on common interests. Subsequently, the international oil price fell sharply, and the market confidence in long styrene will also weaken.

Rapid expansion of production capacity

According to the domestic production situation, the price of pure benzene has increased recently. The data shows that on January 8, the price of Jiangsu’s cans was 5900 yuan / ton, about 150 yuan / ton higher than the low point at the beginning of the year. The price of ethylene is relatively stable near the lowest level in the past decade. The price of raw materials increased steadily, and the profit of styrene was poor in the near future. According to rough estimation, the production cost of styrene in East China is about 7600 yuan / ton, and the processing profit is about – 300 yuan / ton. Although the production efficiency of styrene is not ideal at present, there are not a large number of units in China for shutdown maintenance. Data shows that as of January 2, the national styrene operating rate was 82.5%, near the highest level in the same period of nearly six years. At present, the 300000 t / a styrene unit of Xinyang Technology is still under maintenance, and it is planned to restart in mid January; Shandong Yuhuang plans to start on January 10, and there is no new maintenance plan. Therefore, it is expected that the domestic styrene operating rate will remain high in the near future.

To make matters worse, on December 30 last year, the “40 million tons / year refining and chemical integration project (phase I)” oil refining, aromatics, ethylene and downstream chemical plants invested and built by Zhejiang Petrochemical Company have opened the whole process, realized stable operation and produced qualified products. Zhejiang Petrochemical phase I project involves an annual production capacity of 1.2 million tons of styrene, accounting for about 13% of the existing domestic production capacity. In addition, in the first half of the year, Hengli Petrochemical (600346, Guba) styrene plant with an annual capacity of 720000 tons is planned to be put into operation. In the second half of the year, Baolai chemical, Anhui Jiaxi and other units are planned to be put into operation. It is expected that domestic styrene supply will become more relaxed.

Insufficient demand follow-up

At present, the overall profit of the downstream industry is still good, but some industries are in the off-season demand. Data shows that in early January, EPS gross profit of East China was about 730 yuan / ton, PS gross profit was 1000-1110 yuan / ton, and ABS manufacturer’s profit was about 1900 yuan / ton. High profit makes the industry’s willingness to reduce the negative rate of operation weak, but some industries continue to decline due to the impact of the off-season. As of January 2, the operating rate of EPS industry is 47.34%, which is the seventh consecutive week of decline. As the real estate industry has entered the construction slack season, it may continue to decline in the later period. PS demand is good, and the commencement has been improved, but Jiangsu green an Qingfeng stopped for maintenance on January 5, and will restart in early February, about 25 days of maintenance, which may lead to a slight decline in the operating rate of the industry. ABS, UPR and styrene butadiene industry are relatively stable 。 In addition, in the near future, most prices in the downstream market have declined slightly, and the overall operating rate of the short-term downstream industry is likely to weaken slightly.

From the medium and long-term analysis, in 2020, the new capacity of downstream EPS, PS and ABS is planned to be 740000 tons, 400000 tons and 200000 tons respectively, which is less than the increase of upstream capacity. In addition, most new downstream units are planned to be put into operation in the second half of 2020. Considering the postponement, the capacity that can be realized in 2020 will be more limited.

In a word, the domestic styrene operating rate is at a high level. In addition, new units of Zhejiang Petrochemical Co., Ltd. are put into operation, and there are few new maintenance plans. It is expected that the supply of styrene will be loose in the short term. On the demand side, it is difficult to significantly increase the demand due to the holiday near the Spring Festival downstream. Styrene is expected to gradually enter the accumulation stage. In terms of operation, it is recommended to give priority to short selling and set stop loss.