Monthly Archives: September 2018

Oil-producing countries refuse to increase production, and international crude oil market faces supply gap

Earlier, US President Trump has repeatedly called on oil-producing countries (OPECs) and other oil-producing countries to increase production to lower crude oil prices. However, after the main OPEC and non-OPEC oil producers meeting held last Sunday, they did not issue a statement on increasing production.

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Since then, international oil prices have continued to strengthen. After Monday’s close, at 19:30 on the 25th, Beijing time, Brent crude oil futures price rose 0.54% to 81 US dollars per barrel, and New York crude oil futures price rose 0.44% to 72.39 US dollars per barrel. Market participants pointed out that oil-producing countries have not reached consensus on increasing oil production or continue to boost international oil prices, and the crude oil market will face a supply gap in the next three to six months.

US pressure is invalid

On Sunday, OPEC and non-OPEC oil-producing countries held a meeting in Algeria. The failure to form a consensus on increasing production at this meeting is an important cause of the surge in international oil prices. The oil-producing countries “disregarded” the remarks made by US President Trump’s request to “reduce oil prices” and did not intend to immediately increase crude oil production.

According to foreign media reports, representatives of major oil producing countries said that the participating parties reiterated 100% compliance with the goal of reducing production. In the case that OPEC and non-OPEC oil producers have agreed to increase oil production in June, it is impossible for participants to suggest further increases.

Saudi Oil Minister Khalid Falih said that the global crude oil market is balanced, so measures that affect oil prices will not be taken. He pointed out that Saudi Arabia has spared no effort to increase crude oil production, but “not now” may not be necessary next year, because according to OPEC’s forecast, non-OPEC production growth may exceed global demand growth. The interim report released by OPEC predicts that the supply of non-OPEC oil producers led by the United States will increase by 2.4 million barrels per day in 2019, while global oil demand will only increase by 1.5 million barrels per day.

Falih pointed out that the focus is turning to 2019. It has already gained an understanding of the prospects for an increase in inventories in 2019, which is caused by a substantial increase in supply from non-member states. “The news I got was that there is sufficient supply of crude oil. I don’t know which refineries that need crude oil can’t get crude oil. Given the quantity seen so far, it is very unlikely to increase production in 2019, unless there is any accident on the supply and demand side.”

Russian Energy Minister Alexander Nowak also believes that there is no need to immediately increase crude oil production. Trade disputes and US sanctions against Iran are bringing new challenges to the crude oil market.

China’s crude oil imports in August increased by 6.5% from the previous month

According to statistics released by the Chinese Customs Department, China’s crude oil imports in August increased by 6.5% from July, driven by the rebound in demand from small independent refiners, reaching its highest level since May.

According to statistics released by the General Administration of Customs of China, China imported 38.38 million tons of crude oil in August, importing an average of 9.04 million barrels of crude oil per day.

China’s August crude oil imports in August were 8 million barrels higher than the same period a year ago and 8.48 million barrels higher than in July, but slightly lower than the 9.12 million barrels predicted by Thomson Reuters Petroleum Research.

Statistics also show that China imported a total of 299 million tons of crude oil in the first eight months of this year, an increase of 6.5%.

U.S. anti-dumping final ruling on China PTFE resin

On September 20, the US Department of Commerce announced an anti-dumping affirmative final ruling on polytetrafluoroethylene (PTFE) Resin imported from China and India, ruling: (1) Daikin Fluorine (China) Co., Ltd. [ Daikin Fluorochemicals (China) Co., Ltd.) dumping rate of 91.65%, Shandong Dongyue Polymer Material Co., Ltd. dumping rate of 54.41%, other Chinese producers with separate tax rates The exporter’s dumping rate was 77.13%, and the other Chinese producers/exporters who did not receive a separate tax rate had a dumping rate of 218.88%; (2) the dumping rate of India’s only mandatory respondent company, Gujarat Fluorochemicals Limited, and other Indian producers/exporters. Both are 22.78%. The US International Trade Commission is expected to make a final ruling on the anti-dumping industry in this case on November 5, 2018. This case involves the coordination of tariffs under the tariff numbers 3904.61.0010 and 3904.61.0090 and some products under the tax number 3904.69.5000.
On September 28, 2017, the American company TheChemours Company FC LLC (Wilmington, DE) filed an application on behalf of the US domestic industry to the US Department of Commerce and the US International Trade Commission (USITC) for PTFE resin imported from China and India. Initiated anti-dumping and countervailing investigations. On October 19, 2017, the US Department of Commerce issued a notice to launch a double-anti-investigation investigation on PTFE resin imported from India, and initiated an anti-dumping investigation on imported PTFE resin imported from China. On November 9, 2017, the US International Trade Commission made a preliminary ruling on the anti-dumping industry damage to PTFE resin imported from China and India, and made a preliminary ruling on the anti-subsidy industry damage to the products involved in India. On May 1, 2018, the US Department of Commerce announced an anti-dumping preliminary ruling on PTFE resin imported from China and India. According to US statistics, the US imports of PTFE resin in China and India in 2017 were 27.5 million US dollars and 24.9 million US dollars respectively.

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Vietnam’s natural rubber exports increased by a quarter-on-quarter

According to the latest data released by Vietnam Customs, in August 2018, Vietnam’s rubber exports totaled 171,100 tons, a significant increase of 20.12% from the previous month and a decrease of 0.28%.

From January to August, Vietnam’s natural rubber exports totaled 877,600 tons, an increase of 9.2% year-on-year.

In August, the amount of natural rubber exported from Vietnam to China was 106,000 tons. From January to August, it was exported to China with 560,600 tons.

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The impact of the natural gas market on China

1. The goal of the Paris Agreement now seems to be out of reach, but the goal is getting closer and closer, and global greenhouse gas reductions are accelerating. However, global energy consumption will not peak in demand for natural gas and oil until 2035.

2. By 2035, China, the United States and the European Union will reach or exceed 20% of the share of renewable energy production. Global demand for natural gas will continue to grow. The Asia-Pacific region, represented by China, accounts for more than 40% of global natural gas demand growth.

3. Liquefied natural gas transported by rail is more competitive than long-haul truck transport. At present, the innovative multimodal mode of LNG (cargo ship + tank container + railway + road) is gradually maturing. Improvements in LNG delivery methods and infrastructure will bring more new investments to the market.

In 2017, the implementation of China’s “26+2” coal-to-gas policy has increased the demand for LNG in northern China, and the diversified transportation mode of LNG ensures the implementation of policies and meets the needs of residents for LNG. , improving the problem of insufficient gas infrastructure.

New Zealand oil prices push up consumer costs

According to data released by Statistics New Zealand on September 11, oil prices have been rising since April 2018, and the cost of retail consumption in New Zealand has been pushed for the fourth consecutive month.

Data show that as of the end of August, New Zealand retail consumption rose by 1%, oil consumption increased by 4.1%.

Su Chapman, head of retail statistics at Statistics New Zealand, said that the rise in consumer pressure was mainly due to rising oil prices, which pushed up the overall price of consumer goods and durable goods in New Zealand.

In May 2018, oil prices throughout New Zealand remained at less than 2 New Zealand dollars per liter (1 New Zealand dollar is about $0.65). By the end of August, oil prices had risen to more than NZ$2.3 per liter and rose by more than 15% in three months.

Economic experts and investors generally believe that although oil prices continue to rise despite external factors, the New Zealand government should also adopt a more active policy response to prevent inflation risks.

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The domestic acetone market fell by a narrow margin on September 13

The business community monitoring manufacturers’ overall offer is stable, but the market has a downward trend. As of now, the market demand in Shandong has dropped by 100-200 yuan/ton, and the implementation price is 5700 yuan/ton. The price around Yanshan is 5950 yuan/ton. The plate fell 100-200 yuan / ton, the new price was 5,500 yuan / ton; South China region offer 6,000 yuan / ton. Overall, the market has a downward trend.

1. Blue Star Harbin 150,000 tons / year phenol ketone device on September 5 temporarily stopped due to gas boiler failure, restarted on September 7. 2. Lihua Yiweiyuan’s 350,000 tons/year phenolic ketone unit was temporarily shut down on September 5 due to equipment failure in the supporting store, and returned to normal on September 7. 3. Huizhou Zhongxin was restarted this week, and it is expected that products will be exported on weekends. 4. This week, the inventory of Huadong Acetone Port was 43,500 tons, an increase of 1,000 tons from last week (September 6), including 26,000 tons of Huaxi stock and 17,500 tons of Hengyang stock.

The acetone analyst of the business community believes that: in September, the manufacturers have more maintenance, but the downstream demand is not good, and the follow-up devices will drive one after another. The market has a downward trend.

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Russia says it has the ability to increase oil production at current levels

According to a Reuters report on Vladivostok, Russia, on September 11, Russian Energy Minister Alexander Novak said on Tuesday that Russian companies have the potential to raise oil production from current levels.

Russia’s oil production in August was 11.21 million barrels per day, almost unchanged from July, close to the high point after the collapse of the Soviet Union.

Russia is a member of the OPEC+ group, which works to stabilize global oil prices.

US Energy Secretary Rick Perry met with Saudi Energy Minister Khalid al-Falih in Washington on Monday, and the Trump administration is encouraging large oil producers to maintain high production.

Perry will meet Novak in Moscow on Thursday.

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The spring of the ethylene industry is coming soon

Ethylene is the basic raw material for the petrochemical industry, and ethylene production has become a measure of the level of development of a country’s petrochemical industry. In recent years, with the rapid development of the national economy, the domestic ethylene industry has developed rapidly and has become the world’s second largest ethylene producer and consumer after the United States. From a global perspective, naphtha is also the main raw material for the production of ethylene. The Middle East and North America are mainly light hydrocarbon (ethane) raw materials, and China’s resource-restricted raw materials are still mainly naphtha. With the rise of the domestic coal chemical industry in recent years, the proportion of domestic coal (methanol) ethylene production capacity to total production capacity has reached about 20%. The domestic ethylene industry has developed a distinctive road different from international counterparts.

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From a global perspective, the production of ethylene capacity has a clear cyclicality, generally divided into raw material-driven and demand-driven. For example, the ethylene plant that was put into operation in the Middle East from 2007 to 2010 was mainly benefited from low-cost ethane feedstock. At present, there is a shortage of ethane in the region, and new plants are mostly based on naphtha or mixed cracking. Since the shale gas revolution in North America, it has brought a lot of cheap ethane since 2011. The ethylene cracking unit in the region has been changed to ethane raw materials, and a large number of ethane cracking units have been built. The overall production time is concentrated in Between 2017 and 2020. The newly added ethylene production capacity in China is mainly driven by demand. Due to high crude oil prices and weakened demand for refined oil in 2011~2017, the newly added capacity is mainly based on coal (methanol) to olefins.

According to statistics, as of the end of 2017, the total domestic ethylene production capacity reached 24.3 million tons, an increase of 4% year-on-year; the output reached more than 18.2 million tons, an increase of 2.4%. The annual import of ethylene reached 2.16 million tons, an increase of 30% year-on-year. As the demand for ethylene-derived products such as polyethylene and ethylene glycol continues to grow, domestic demand for ethylene has steadily increased. In 2017, the apparent consumption of ethylene was about 20.37 million tons, up 4.8% year-on-year; the equivalent consumption of ethylene was about 39 million tons, the equivalent gap was more than 20 million tons, and ethylene and its derivatives were heavily dependent on imports.

The commissioning of some new installations this year will have a positive effect on the supply of ethylene. Among them, the 1.2 million-ton ethylene plant of Zhonghai Shell Phase II has been put into operation, and its commissioning will greatly improve the supply gap in South China. Before the end of the year, the 450,000 tons of Yanan Energy and the 300,000 tons of ethylene equipment from Jilin Cornell will be put into production. The annual new capacity is expected to be around 2 million tons. Beginning in 2019, the country will usher in an outbreak of new ethylene plants. According to incomplete statistics, by the end of 2020, more than 14 million tons of ethylene capacity will be put into production in China, including about 9 million tons of oil routes and 5.5 million tons of coal (methanol) routes. In addition, there are still about 7 million tons of light hydrocarbon (ethane) cracking projects due to the Sino-US trade war, the possibility of short-term shelving is relatively large. If the above-mentioned 14 million tons of equipment can be put into production as scheduled, the shortage of domestic ethylene supply will be greatly improved by then.

After several years of development, there have been some changes in the consumption structure of domestic ethylene. Among them, linear low-density polyethylene (LLDPE) accounts for about 27% of total consumption, high-density polyethylene (HDPE) accounts for about 26%, low-density polyethylene (LDPE) accounts for about 11%, and ethylene glycol accounts for about 11%. Ethylene oxide accounts for about 9% and styrene accounts for about 8%. Among them, ethylene glycol, HDPE and LDPE have the lowest self-sufficiency rates of 34%, 49% and 53%, respectively. The contradiction between supply and demand is outstanding.

On the whole, with the further opening of the domestic crude oil import policy and the maturity of coal chemical technology, more private enterprises began to enter the ethylene industry, and the overall supply pattern of ethylene began to show positive changes. Large-scale refining and chemical integration projects bring cost and technology impacts due to large-scale scale and diversification of raw materials, while coal (methanol) olefins projects also show better cost and raw material advantages under higher crude oil prices. The Chinese model of walking on two legs will bring new development opportunities to the ethylene industry, and the spring of the ethylene industry is not far behind.

China’s styrene supply and demand gap will gradually disappear

As a global trade commodity, styrene has attracted much attention in its distribution pattern and supply and demand trends. China is not only the world’s largest producer of styrene, but also the world’s largest consumer. How will the future supply and demand pattern be interpreted?

From the data on the apparent consumption of styrene in China in recent years, the output, apparent consumption and self-sufficiency rate are all oscillating, while the import volume is declining year by year. Specifically, in terms of output, the total domestic production exceeded 5 million tons for the first time in 2013, and exceeded 6 million tons to 6.55 million tons in 2017, while apparent consumption surged from 8.1 million tons in 2013, 2017. Increased to 9.7 million tons, entering 2018, still continues to increase trend, the apparent consumption in the first half increased to 4.85 million tons.

In recent years, styrene has been affected by the increase in production and the decline in imports, and the self-sufficiency rate has also increased significantly. As of 2017, the self-sufficiency rate has increased from less than 60% in the previous years to 67.62%. In the first half of 2018, the self-sufficiency rate has made a new breakthrough and further increased to 71.3%.

It is worth mentioning that in recent years, the decline in import volume is obvious. According to the import data of the Customs Statistics Bureau, the import volume of styrene in the past few years was basically 3.7 million tons/ton. In 2016, it fell back to 3.5 million tons/year. Below the level, it has fallen to 3.2 million tons/year in 2017. In 2018, affected by anti-dumping and arbitrage changes in various regions, the import volume continued to shrink. The total import volume from January to July was 1.56 million tons, down 115,000 tons year-on-year. From this trend, the annual import volume fell in 2018. Breaking 3 million tons will be a high probability event.

Since 2018, after the Qingdao Bay Chemical 500,000 tons/year styrene plant was officially put into commercial operation after being ignited in mid-January, the 260,000 tons/year installation of Anhui Wuyuan was also stably supplied after the product was released around August 10. Maintain full load operation. Before the deadline, China’s styrene production capacity has reached 9.37 million tons / year. According to the latest news, CITIC Guoan Ruihua currently has 200,000 tons of styrene co-production of 80,000 tons/year propylene oxide plant, Hengli petrochemical 700,000 tons/year styrene plant and the largest domestic Zhejiang Petrochemical refining and chemical integration project. The 10,000-ton/year styrene plant is scheduled to be put into operation before the end of 2018. The annual production capacity of China’s styrene exceeds 11 million tons. It is just around the corner. Although there are still some uncertainties in the actual production progress, the national production and self-sufficiency rate will soon be on the rise. At a new level, China’s styrene supply and demand gap will gradually disappear, and the dependence on imported sources will also drop significantly.

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