Monthly Archives: February 2019

International Energy Agency: China’s coal consumption will show a structural decline

The International Energy Agency (IEA) released the Global Coal Market Report (2018-2023) in Beijing on May 25. According to the report, China’s coal demand has entered a slow downward trend, and the average annual coal consumption will decline at a structural rate of less than 1%.

Coal is still the core of the global energy system, the report said. Because of the advantages of affordable price, abundant reserves and easy transportation, coal is still the main energy source in many countries. Especially in China, South Asia and Southeast Asia, coal also provides energy security and energy popularization functions, and supports local economic development.

EDTA

The report predicts that global coal demand will remain stable in the next five years. Coal consumption in Europe and the United States will decline, but the decline will be offset by growth in India and other Asian countries. The contribution of coal to the global energy structure will decrease from 27% to 25%, mainly from renewable energy and natural gas.

According to the report, 1 ton of every 4 tons of coal in the world is used for power generation in China. Therefore, the fate of coal largely depends on China’s power sector.

Liu Baohua, deputy director of the State Energy Administration, said at the meeting that 70% of China’s coal-fired power units have achieved ultra-low emissions. China has built the largest clean coal-fired power supply system in the world, effectively alleviating the contradiction between energy supply and environmental protection, and demonstrating the clean use of coal worldwide.

The conference was jointly organized by the International Energy Agency and the National Energy Group and sponsored by China Shenhua Energy Co., Ltd.

Melamine

Crude oil “brake” and some chemical products “fall behind”

Following the consecutive surge, the crude oil market has recently recovered, with the main domestic crude oil futures contracts falling by 4.73% on February 26. The sharp drop in oil prices also dragged down futures prices of fuel oil, asphalt and PTA. Analysts said that the comments made by President Trump on oil prices and Russia’s weak capacity to cut production were all a drag on the trend of oil prices. It is expected that the short-term oil price will maintain the trend of recovery, but the medium and long-term is still expected to oscillate upward.

Benzalkonium chloride

Crude oil futures plummeted

Domestic crude oil futures fell sharply on the 26th, with the main 1904 contract closing at 427.5 yuan/barrel, a new low since February 12, closing at 433.1 yuan/barrel, down 4.73%. Fuel oil futures fell sharply with the main 1905 contract closing at 2808 yuan/ton, down 3.7%. Asphalt futures main 1906 contract closing at 3210 yuan/ton, down 1.17%. PTA futures main 1905 contract closing at 6406 yuan/ton, down 1.11%.

Li Lei, a chemical researcher at Meyer Futures, said that on the evening of the 25th, US President Trump issued a tweet calling for OPEC to ease production cuts. Affected by this, crude oil futures prices fell sharply, and fuel oil, asphalt and other futures varieties also fell to varying degrees. Tian Yujia, a chemical analyst at Dongwu Futures, added that Russia’s weak capacity to reduce production also poses a drag on the crude oil market.

From a deeper point of view, Li Lei believes that “Trump’s statement is only the cause of the lower oil price, and the two factors of the increase of U.S. commercial crude oil stocks for five consecutive weeks and the weakening of the monthly difference in crude oil contracts are the internal causes of the change of oil prices from rising to falling.”

Short-term fear of continued callback

Sodium Molybdate

“The future crude oil market fundamentals will be dominated by three factors: OPEC production reduction, U.S. shale oil production increase and weak demand.” Li Lei said that OPEC maintained a high level of production reduction, combined with instability in Libya and Venezuela, and the first half of OPEC production reduction will provide support for oil prices. Although shale oil production in the United States has maintained a low growth rate recently due to pipeline constraints, it is expected to accelerate in the second half of the year as pipelines are gradually put into operation, which will have an impact on the crude oil market. In addition, the slowdown of global economic growth may also affect the prospects of crude oil demand. Some institutions have lowered their expectations of crude oil demand growth in 2019, putting long-term pressure on the oil market.

Tian Yuejia said that due to the rapid growth of shale oil production, the production of light oil soared, and the current U.S. gasoline inventory is at the top of the historical range, the U.S. crude oil market focuses on the process of product oil de inventory. Brent crude oil market needs to pay attention to the reduction of Saudi Arabia and Russia. If Saudi Arabia maintains low production, the crude oil supply will have a gap when the peak consumption season comes.

For the future market, Tian Yujia said that the short-term crude oil prices will maintain a pullback trend. However, in the medium and long term, the contradiction between supply and demand of light and heavy oil may be difficult to solve, and crude oil can still be used as a multi-head configuration.

Li Lei also said that although OPEC production cuts provide power for oil prices to rise, because of weakening expectations on demand side and increasing production of shale oil in the United States, production cuts have not been smoothly transmitted to the inventory side, so the U.S. commercial crude oil stocks have increased for five consecutive weeks, and it is expected that short-term oil prices will maintain a retracement trend, but the long-term upward trend is still expected to remain volatile. In terms of operation, under the background of short-term weakness of crude oil, chemical futures, such as asphalt and PTA futures, which have high correlation with oil prices and weak fundamentals, will face downward pressure and can be short-term allocation.

http://www.lubonchem.com/

In January, China imported 12.33 million tons of power coal annually increased by 208.25% and 4.85%.

According to the latest data released by the General Administration of Customs, in January 2019, China imported 12.33 million tons of power coal (including bituminous coal and sub-bituminous coal, but not lignite, the same below), an increase of 570,000 tons, an increase of 4.85%, an increase of 8.33 million tons annually, an increase of 208.25%.

Azodicarbonamide (AC foaming Agent)

Imports in January 2019 amounted to $933,341,000. As a result, the unit price of imports was $75.7 per ton, an increase of $11.53 per ton from the previous year, an increase of $2.65 per ton from the previous year.

In January 2019, China imported 12.85 million tons of lignite, an increase of 2.65 million tons, an increase of 25.98%, and an increase of 10.1 million tons annually, an increase of 367.27%. Imports amounted to $546.153 million, an increase of 2.3% over the same period last year.

EDTA

The soaring export of refined oil has depressed the profits of Asian refining industry

According to Reuters in Singapore, Asia’s largest oil consumers are exporting large quantities of refined oil to the region, as refining output exceeds consumption in the context of slowing demand growth, putting pressure on industry profits.

Melamine

Since 2006, the Asia-Pacific region has been the largest oil consumer in the world, driven by the traditional industrial consumer countries Korea and Japan, as well as the rising economic powers China and India. However, the over-construction of refineries and the slow growth of demand have led to a substantial increase in the export of refined oil products from these demand centers.

The surge in refined oil exports, coupled with a 25% surge in crude oil prices so far this year, has reduced the profit margin of the Asian benchmark Singaporean refinery from more than $11 a barrel in mid-2017 to just over $2 a barrel at present.

Benzalkonium chloride

INEOS Styrolution announced the completion of its acquisition of two polystyrene production bases in China

INEOS Styrolution, the world’s leading supplier of styrene products, has recently announced that it has obtained the approval of relevant regulatory and legal bodies to complete the acquisition of Doodle polystyrene production base. The acquisition was agreed on August 31, 2018, including the acquisition of Foshan Production Base in South China and Ningbo Production Base in Zhejiang Province in East China, as well as the acquisition of two sales offices in Guangzhou and Shanghai. The annual production capacity of each production base is as high as 200,000 tons.

Bacillus thuringiensis

The acquisition follows INEOS Styrolution’s “triple transfer” development strategy, which not only allows us to increase production plants in key Asian markets, but also to enter the domestic market through localized production.

“We will continue to implement our development strategy.” Kevin McQuade, chief executive of INEOS Styrolution, said. “This is the second successful acquisition in the Asia-Pacific region after K-Resin business acquisition and integration. We also define the Asia-Pacific region as the business focus growth area of INEOS Styrolution.

Sodium Molybdate

Steve Harrington, president of INEOS Styrolution Asia Pacific, was heartened by the new opportunities offered by the acquisition: “This acquisition not only enables us to better serve existing customers in the Asia Pacific region, especially the household appliances and electronics industries, but also provides us with opportunities to explore the Chinese market.”

INEOS Styrolution

INEOS Styrolution is a leading global supplier of styrene products, focusing on styrene monomers, polystyrene, ABS general materials and styrene special materials. With excellent production equipment and over 85 years of rich experience, INEOS Styrolution can provide the best quality solutions to help customers win competitive advantage in the market and achieve success. The company provides styrene products for many industries, including automotive, electronic, household appliances, construction, health care, toys/sports/leisure and packaging. In 2018, the company’s sales reached 5.4 billion euros. INEOS Styrolution has about 3,500 employees and 20 production bases in 10 countries.

http://www.lubonchem.com/

In January, China’s copper scrap imports fell 11.5% year-on-year and alumina imports increased 5.4% year-on-year.

Data released by the General Administration of Customs on Saturday showed that China’s imports of scrap metals fell 32.7% to 330,000 tons in January from a year earlier.

Azodicarbonamide (AC foaming Agent)

Among them, the import of copper scrap decreased by 11.5% to 180,000 tons, and the import of aluminium scrap decreased by 34.4% to 120,000 tons.

In January, the import of alumina increased by 5.4% to 80,000 tons, while the export of alumina increased by 142,864 tons.

EDTA

Colombia’s coal exports fell 17.4% year-on-year in 2018.

According to data released by the National Statistical Agency of Colombia (DANE), Colombia’s coal exports from January to December 2018 were 86.892 million tons, down 17.4 percent from 18.343 million tons a year earlier. Among them, coal exports in December were 76.08 million tons, down by 7.129 million tons, or 48.4 percent, compared with the same period last year.

Melamine

China’s Ethylene Glycol Market: Oversupply and Weak Patterns or Difficult to Change

Due to the slow recovery of terminal demand of ethylene glycol, the imbalance between supply and demand of ethylene glycol is difficult to change in a short time. In this case, supply pressure is still the dominant factor in the ethylene glycol market, and ethylene glycol will continue to find the bottom.

Obvious supply pressure

Oversupply is the main reason why the price of ethylene glycol has continued to weaken since the fourth quarter of last year. At present, the problem of oversupply still exists.

First, in terms of domestic supply, as of February 15, the start-up rate of ethylene-based ethylene glycol production in China was 83.5%, up 3.3 percentage points from the previous week; the start-up rate of coal-based ethylene glycol production was 84.6%, up 16.3 percentage points from the previous week. The overall starting load of ethylene glycol in China is 85%, which is 8.4 percentage points higher than the previous week. With the increasing start-up load of ethylene glycol, domestic market supply will further increase, and the problem of oversupply will further aggravate.

Benzalkonium chloride

Secondly, on the import side, due to the abundant supply of domestic ethylene glycol, the price has always been at a low level, and the arbitrage window for ethylene glycol imports has always been closed. Up to now, the price of Imported Ethylene Glycol discounted RMB has risen to about 200 yuan/ton of spot price in East China. Demand for high-priced imports has declined, and imports of ethylene glycol have declined since the fourth quarter of last year. Looking ahead, the ethylene glycol plants in India and Thailand will be overhauled, the international supply will be tightened, and the price gap between internal and external markets is expected to expand, thus further restraining imports.

Third, due to poor downstream consumption, ethylene glycol port inventory is high, creating a new high in recent five years. As of February 14, the inventory of ethylene glycol ports in East China was 1.066 million tons, up by 460,000 tons, or 75.91%, from the peak of ethylene glycol at the beginning of October last year. Among them, Zhangjiagang’s ethylene glycol inventory was 751,000 tons, up 438,000 tons from the beginning of October last year, up by 139.94%; Taicang’s ethylene glycol inventory was 115,000 tons, up by 67,000 tons from the beginning of October last year, up by 6.48%; Ningbo’s ethylene glycol inventory was 93,000 tons, down by 44,000 tons from the beginning of October last year, down by 4.12%.

Overall, although the arbitrage window is closed and imports are declining, it is difficult to change the situation of domestic supply pressure. At present, the domestic ethylene glycol start-up load has increased, and the inventory has reached a new high in the stage. The effect of oversupply on the price of ethylene glycol is still obvious, and the market needs time to inventory.

Sodium Molybdate

Cost Support Appearance

The rebalancing process of global crude oil supply and demand is expected to accelerate due to the implementation of OPEC output reduction exceeding expectations. Influenced by market factors, international crude oil has been rising recently. In this case, the cost focus of ethylene to ethylene glycol will be shifted upwards, which will provide strong support for ethylene glycol which is currently in a slight profit state.

Slow recovery of demand

After the Spring Festival, the polyester enterprises which had been repaired in the earlier period resumed production one after another. At present, polyester inventory is at a low level, polyester enterprises urgently need to increase production to meet the upcoming peak consumption season. It should be noted that due to the shortage of terminal orders, the process of terminal weaving resumption has slowed down this year, and the willingness of enterprises to take goods is not strong. Therefore, the warming of demand may be less than expected, thus delaying the process of ethylene glycol de-inventory.

Forecast for future market

In summary, due to the slow recovery of demand, the imbalance between supply and demand of ethylene glycol is difficult to change. In this case, excessive supply pressure is still the dominant factor in the price of ethylene glycol. At present, the inventory is high, and the disadvantaged pattern of ethylene glycol is still difficult to change in a short time.

http://www.lubonchem.com/

Last year, the economic benefit of China’s iron and steel industry reached the best level in history.

Reporters recently learned from the Ministry of Industry and Information Technology: last year, China’s iron and steel industry continued to promote structural reform on the supply side, industrial structure continued to optimize, market order improved significantly, and the industry’s economic benefits reached the best level in history.

Azodicarbonamide (AC foaming Agent)

In terms of output, the output of pig iron, crude steel and steel (including duplicate materials) in China last year was 771 million tons, 928 million tons and 1.106 billion tons, respectively, increasing by 3.0%, 6.6% and 8.5% over the same period of last year, with crude steel production reaching a record high. Last year, the apparent consumption of crude steel in China reached 870 million tons, an increase of 14.8% over the same period of last year, and the self-sufficiency rate in China exceeded 98%.

From the price point of view, due to supply side structural adjustment, environmental protection supervision, strong market demand and other factors, China’s steel prices were running at a high level last year. The comprehensive steel price index averaged 115.8 points, an increase of 7.6% over the same period last year, and the industry benefits reached the best level in history. Last year, China’s steel industry realized a profit of 470.4 billion yuan, an increase of 39.3% over the previous year.

EDTA

OPEC’s production cuts have brought oil prices close to 2019 highest level

According to offshore engineering reports, oil prices, supported by OPEC-led production cuts, are close to a high of nearly $67 per barrel in 2019, although rising oil prices are constrained by concerns that slower economic growth may affect demand.

Oil supply restrictions led by OPEC helped crude oil prices rise by more than 20% this year. U.S. sanctions against OPEC members Iran and Venezuela have also tightened markets.

Melamine

Brent crude fell 21 cents to $66.29 a barrel at 1249 GMT, not far from Monday’s 2019 high of $66.83. U.S. crude oil prices rose 44 cents to $56.03.

Harry Tchilinguirian, global head of commodity market strategy at BNP Paribas, said: “The market is slowly restoring its bullish base under the influence of economic risks associated with trade negotiations between the United States and China.”

Demand-side concerns remain a major drag on prices. HSBC Holdings warned on Tuesday that the slowdown in China and the UK will create more obstacles this year.

Sodium Molybdate