Production of soda ash

Production capacity and output of soda ash in China. In the early 1990s, China ended its long-term dependence on imports and gradually became a net exporter of soda ash. Since 2003, China’s soda ash production capacity and output ranked first in the world, reaching a historical high in 2014. As of 2018, China’s soda production capacity is 31.15 million tons, and the output is 26.21 million tons.

Capacity and output of light and dense soda ash. In 2018, China’s light soda ash output is 13.25 million tons and the dense output is 12.96 million tons. From 2007 to 2018, the proportion of heavy alkali production increased from 30% to 49%, and the growth rate of heavy alkali production was also much higher than that of light alkali.

Production capacity of soda ash with different production processes. As of 2018, there are 44 soda ash manufacturers in China. Among them, there are 29 enterprises using the combined alkali process, most of which have production capacity less than 1 million tons, mainly distributed in Henan, Hubei, Jiangsu, Sichuan and Chongqing. There are 12 enterprises adopting ammonia alkali process, most of which have production capacity higher than 1 million tons, mainly distributed in Qinghai, Jiangsu and Shandong. There are only three enterprises using natural alkali method, two of which are located in Henan and one in Inner Mongolia.

Distribution of soda production capacity. China’s soda ash production is mainly concentrated in East China, central China and Northwest China. The total production capacity of Jiangsu in East China is 5.5 million tons, accounting for 46%; Henan in Central China is 4.2 million tons, accounting for 66%; Qinghai in Northwest China is 4.3 million tons, accounting for 83%. In 2018, the utilization rate of national soda production capacity is 84%, and soda production units are distributed in 22 provinces (cities, autonomous regions). Henan and Qinghai rely on rich raw material resources and geographical advantages to continuously release new capacity.

In 2018, the capacity of soda ash in Central China is 6.36 million tons, accounting for 20% of the total capacity of the country, including 4.2 million tons in Henan, accounting for 66% of the total capacity of central China and 13% of the total capacity of the country; the capacity of soda ash in Northwest China is 5.15 million tons, accounting for 17% of the total capacity of the country, including 4.3 million tons in Qinghai, accounting for 83% of the total capacity of the northwest region and 14% of the total capacity of the country. In addition, the production capacity of soda ash in North China, Southwest China, South China and Northeast China respectively accounts for 12%, 9%, 2% and 2% of the total production capacity of the country.

Concentration of soda industry. As of 2018, there are 44 soda ash manufacturers in China. There are 12 enterprises with an annual production capacity of 1 million tons or more, with a total production capacity of 17.6 million tons, accounting for 56% of the total production capacity; there are 13 enterprises with a production capacity of 500000-1 million tons, with a total production capacity of 8.35 million tons, accounting for 27%; there are 19 Enterprises with a production capacity of less than 500000 tons, with a total production capacity of 5.2 million tons, accounting for 17%.

The existing large-scale production groups in China’s soda industry mainly include Tangshan Sanyou, China’s salt industry, Jinshan Chemical Industry and Yuanxing energy, accounting for 10.91%, 8.44%, 6.42% and 5.78% of the total national production capacity, respectively, totaling over 31%.

Soda demand

Overall demand. China is the largest soda consumption country in the world. With the development of economy, the consumption of soda ash in China is increasing. In 2018, China’s total demand for soda ash was 25.12 million tons, a decrease of 660000 tons compared with 2017, an increase of 6.35 million tons compared with 2010, and a total increase of 34% in 8 years. Among them, the demand for heavy alkali is 13.47 million tons, an increase of 64% compared with that in 2010; the demand for light alkali is 11.65 million tons, an increase of 10% compared with that in 2010, and the contribution rate of the demand growth for heavy alkali to the total demand growth of soda ash is 83%. The demand for light alkali in the downstream is growing slowly. In 2018, the demand for light alkali in China was 11.65 million tons, an increase of 1.1 million tons compared with 2010.

Demand structure. In the application field of soda ash in China, 4% of soda ash is used in the food industry, belonging to the category of edible soda ash; 96% of soda ash is used as raw materials or auxiliary agents for industrial production, belonging to the category of industrial soda ash. Generally speaking, to produce 1 ton of flat glass requires 0.2 tons of heavy alkali, that is, a float glass production line with a daily melting capacity of 1000 tons consumes 200 tons of soda per day. In recent years, the demand for soda ash in the flat glass industry as a whole presents the characteristics of “V”. From 2013 to 2014, the demand for soda ash for flat glass has always remained above 11.6 million tons. In 2018, the consumption of heavy alkali in the glass industry was 13.03 million tons, up 9.9% month on month, and the demand remained at a high level in the past five years.

Import and export of soda ash

China is a net exporter of soda ash. In 2018, China exported 1379000 tons of soda ash, imported 294000 tons of soda ash, and exported 1085000 tons of soda ash. Compared with the total output and demand of domestic soda ash, the proportion of export and import is not high, which is only one of the adjustment ways of supply and demand balance of domestic soda market.

Since 2007, the annual export volume of soda ash in China is about 1.8 million tons, accounting for 8% of the domestic annual output. After 2009, the domestic demand for soda ash is stronger, the enterprise profit is maintained at a reasonable level, and the export volume of domestic soda ash falls down as a whole. Except for 2015, the export volume is less than 2 million tons, and the export volume in 2018 is 1.38 million tons.

According to the nickel price monitoring of the business association, on November 27, the spot price of nickel was 118316.67 yuan / ton, down 13.32% from 136500 yuan / ton at the beginning of the month, up 32.19% from the beginning of the year, up 24.98% year on year. Nickel prices fell continuously this month, and the main reason for the previous gains was that there was sufficient supply and light demand.

According to the current nickel schedule of the business association, the spot price of nickel in this month is higher than the main contract price, the main contract price is the price of nickel in the next two months, and the spot price is higher than the main contract price of nickel, indicating that everyone is not so optimistic about nickel in the future.

Indonesia resume export

In September, Indonesia’s nickel mine export rose rapidly, and China’s imports from Indonesia increased by 55.8% month on month. Indonesia’s nickel export data in October increased by a staggering 300% compared with the same period in 2018, further dampening sentiment in the nickel market. In November, Indonesian ports recovered some vessels seized during the preliminary grade inspection, but they were mainly used to deliver preliminary orders, and the market circulation spot resources were scarce. Indonesia announced on October 28 that it would suspend nickel ore export for illegal investigation. Indonesia said on October 11 that it had approved nine enterprises to restart nickel ore export.

In addition, from November to March every year is the traditional rainy season in the Philippines, during which the export volume of nickel ore is expected to decrease significantly. Nickel imports are expected to grow only modestly in November and December, although domestic refineries have been stocking up ahead of time and are in short-term short supply.

Nickel inventory recovery

According to the data, the domestic output of NPI in October was 52400 tons, a decrease of 0.64% on a month on month basis and an increase of 30.34% on a year-on-year basis. The overall increase of port nickel ore inventory is significant, and the supply of nickel ore is relatively loose. In addition, the capacity of ferronickel at home and abroad continued to release, and the pressure of ferronickel supply gradually increased, dragging down the trend of nickel price.

Weak demand for stainless steel production increase

In October, the national stainless steel output was 2.406 million tons, a decrease of 2.67% on a month on month basis, an increase of 4.29% on a year-on-year basis; it is expected that the output in November will be 2.425 million tons, a slight increase of 0.79% on a month on month basis. Moreover, the stainless steel inventory is at a historical high level, and the pressure of de stocking in the later stage is large. The downstream stainless steel industry has entered into the traditional off-season of consumption. With the continuous decline of nickel price, the stainless steel market is also in a downturn, and the raw material inventory in the early stage is relatively sufficient. In addition, the overall capital and sales pressure are increasing near the end of the year, and the willingness of steel plants to purchase raw materials is poor, and the short-term downstream demand for nickel is difficult to improve significantly.

Xinneng automobile encounters Waterloo

In October, the production and sales of new energy vehicles were 95000 and 75000 respectively, down 35.4% and 45.6% year on year. Among them, the production and sales of pure electric vehicles were 78000 and 59000, down 33.3% and 47.3% year-on-year respectively; the production and sales of plug-in hybrid vehicles were 16000, down 44.3% and 38.7% year-on-year respectively. New energy vehicles encounter Waterloo, which reduces the consumption of three-way batteries and inhibits the demand for nickel.

To sum up: in the absence of substantial production reduction in stainless steel plants, it is difficult to change the status quo of high stainless steel inventory and weak market. Under the negative feedback of cold steel market and new energy vehicles, the overall short-term performance of nickel price is still weak. However, with the approaching of Indonesia’s mining ban period and the arrival of the traditional rainy season in the Philippines, the expected production reduction of domestic nickel iron plants is expected to increase, or the price of nickel is expected to increase Support.

According to the price monitoring of the business agency, on November 27, the domestic PTA spot market price continued to fall slightly, with the market average price at 4838 yuan / ton, down 0.62% compared with the previous trading day, down 22.04% year on year. The main futures market (2001) closed at 4746 yuan / ton, down 40 yuan / ton or 0.84% compared with the previous trading day. Daily trading volume decreased by 302100 to 879700, and position increased by 13378 to 1415200.

 Shanghai Yadong Petrochemical Co., Ltd. and Hainan Yisheng PTA plant have been heated up and restarted, and the operating rate has been raised to 95%. Dushan energy phase I 2.2 million tons PTA plant and another 1.1 million tons of lines have been put into operation successfully, PTA market maintained a downward trend under the influence of new supply pressure.

Enterprise name capacity device dynamics

Jialong Petrochemical 60 was shut down for maintenance on August 2, and the restart was to be determined

Jiaxing Petrochemical Co., Ltd. 150 shut down on November 12 as scheduled, and planned to maintain for 2 weeks

Maintenance in December is planned for hailun Petrochemical 120

Ningbo Taizhou Chemical Co., Ltd. stopped for a short time on November 13 and resumed normal production

Yadong Petrochemical Co., Ltd. shut down for maintenance on November 13, 70. At present, the unit has been heated up and restarted, and now it has been discharged

Hanbang Petrochemical Co., Ltd. reduced load by 90% at 220

Chuanneng chemical 100 fault stopped short on November 1, and the current load is 80%

Yisheng Hainan 200 has been gradually warmed up and restarted. The device was shut down for maintenance on November 22

In terms of cost, the closing price of PX market in Asia fell by US $1 / ton, closing at US $771 / ton FOB South Korea and US $791 / ton CFR China. Downstream part of the mainstream polyester plant outgoing maintenance plan, so the demand side weakened. Polyester filament market fell steadily, with polyester POY (150D / 48F) cut by 50 yuan / ton to 6900.00-7250.00 yuan / ton in some mainstream factories in Jiangsu and Zhejiang. DTY (150D / 48F low bomb) is at 8500.00-8750.00 yuan / ton, FDY (150D / 96F) is at 6950.00-7250.00 yuan / ton, and the price is stable temporarily. The comprehensive starting rate of Jiangsu and Zhejiang looms is about 74%. The terminal factory is currently in the process of making foreign Christmas orders. The orders are basically coming to an end. Some orders will be issued in spring and summer next year, but the order quantity is not large and the product delivery speed is average.

Xia Ting, an analyst with business club, believes that polyester maintenance will increase this week, especially from late December to January, when polyester devices have a large area of maintenance plan, and terminal textile enterprises will gradually reduce orders with the beginning of December, so it is expected that the loom load in Jiangsu and Zhejiang is expected to decline, and PTA demand will be affected. And affected by the current PTA new capacity suppression, overall, it is expected that the market will continue to weaken.

Overall, the current US crude oil production has increased by 1.1 million barrels / day compared with the beginning of the year. From the perspective of the number of American oil rigs, it is another scene: at present, the number of active oil well rigs is 674, while the number of rigs at the beginning of the year is 877, with a decrease of 23% in the year. Why is there such a sharp contrast between US crude oil production and the number of rigs? When will US crude oil production peak?

According to EIA weekly data, as of November 8, US crude oil production reached another record high of 12.8 million barrels / day. Oil prices fell sharply after the EIA data was released, as investors worried that US crude oil production would take another step after the bottleneck of us pipeline capacity was eased, hedging OPEC’s production reduction.

From the perspective of shale oil production process, the producers first drill oil wells through drilling rigs, then complete wells and install acquisition equipment, and finally exploit shale oil. However, in the first month of new well exploitation, due to the backflow of hydraulic fracturing fluid, the flow of oil and gas is limited, and the production of new well is the largest since the second month, but after the third month, due to the attenuation effect of shale oil, the production begins to decline gradually.

Continuous production of new wells is the main source of shale oil production growth in the United States. Only when the production of new wells exceeds the attenuation of old wells, will the production of shale oil in the United States increase. According to the methodology of EIA drilling rig report, we can analyze the shale oil production of new wells from the current number of active drilling rigs and the production efficiency of single drilling rig, while the attenuation of old wells can be estimated by referring to the attenuation data of EIA drilling rig report and the attenuation curve of shale oil.

According to the number of drilling rigs released by Baker Hughes, the number of active oil and gas drilling rigs in the United States has continued to decline since the beginning of 2019, but in addition to the number of drilling rigs, the production efficiency of drilling rigs is also an important factor affecting shale oil production, mainly because when the number of drilling rigs drops, producers tend to improve production efficiency to stabilize crude oil production.

What is rig productivity? In fact, it refers to the shale oil production corresponding to a single drilling machine. We can study this index separately by dividing it into three items: monthly average drilling number of a single drilling machine, well completion rate and shale oil production of a single well. The average monthly drilling number and single well production of the drilling rig basically have little change. The main factor driving the recent increase of drilling rig efficiency is the substantial increase of well completion rate. According to EIA data, the current completion rate is about 1.17, which means that the current completion number exceeds the drilling number, that is, the production of Duc well begins to release continuously.

However, the number of Duc wells is limited after all, and due to the attenuation effect of the oil field, the incremental effect of the production release of Duc wells on the later shale oil will gradually decrease. If we refer to the release of Duc wells in 2016, the monthly release of Duc wells is about 100, but considering that the current inventory of Duc wells is far higher than that in 2016, it is estimated that the current release rate of Duc wells is higher than that in 2016, we estimate the contribution of the release rate of Duc wells in 100 / month, 150 / month and 200 / month to the new production of shale oil in the later period, and we can get the fourth quarter page of 2019 The increment of shale oil is between 65000-75000 barrels / day and 24000-67000 barrels / day in the first quarter of 2020, with obvious attenuation effect.

In addition, from the perspective of the decrement of the old oil field, although the absolute value is still increasing, the growth rate is gradually slowing down. According to the ratio of the decrement of the current period to the efficiency of the drilling rig, we can estimate the number of drilling rigs needed to maintain the current production. At present, the number of active rigs is still higher than the number of rigs needed to maintain the current production, indicating that the new production of new wells is higher than the decrement of old wells. Therefore, although the current growth rate of crude oil production in the United States slows down, it still keeps a positive growth, which is the fundamental reason why the number of rigs and the crude oil production in the United States are reversed this year.

In the later stage, if the current rig efficiency is assumed to remain unchanged and the decline rate of the number of rigs is maintained at the average decline rate of about 25 sets / month this year, it is expected that the number of rigs in December will fall below the minimum number of rigs required to maintain production. However, considering the gradual improvement of drilling rig efficiency (mainly the impact of the release of Duc wells on production), and assuming the release rate of Duc wells is 150 wells / month, shale oil production in December still has room for growth, and the time when shale oil production in the United States begins to decline is expected to be postponed to January February 2020, which will form a certain support for oil prices.

In addition to the increase of crude oil supply in the United States, non-U.S. supply and demand expectations also have a greater impact on oil prices. The main factors supporting the upward trend of oil prices are the favorable trade negotiations in the near future and the improvement of the macro environment for U.S. stocks to innovate again. In addition, the December OPEC ministerial meeting will also be the key variable to determine the later crude oil supply, but the current situation is not clear. On the one hand, Saudi Aramco is going to be listed, and Saudi Arabia has the power to further reduce production to improve the oil price and the valuation of Aramco; on the other hand, the growth rate of US crude oil production slows down and the international trade situation improves or reduces the probability of OPEC further reducing production. Under the influence of favorable factors such as unsustainable growth of crude oil production in the United States, marginal improvement of macro environment, and geopolitical risks, there is no basis for a sharp drop in oil prices. However, it is still necessary to pay more attention to the OPEC production reduction meeting in December.

On November 26, the hydrogen peroxide commodity index was 136.96, unchanged from yesterday, down 36.88% from 216.98 (2017-12-24), the highest point in the cycle, and up 90.91% 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: in November, hydrogen peroxide entered the cold winter, and the price continued to fall sharply, down more than 14%. At the beginning of the month, the average price of 27.5% hydrogen peroxide was 1466 yuan / ton, and at the end of the month, the average price of 27.5% hydrogen peroxide was 1260 yuan / ton, down 14.09%.

market analysis

In November, the terminal performance was poor and the demand was low. The price of hydrogen peroxide continued to drop. After the first week’s sharp drop, the decline trend became stable and slowed down. It was still difficult to hide the decline. As of the 26th, the average price of 27.5% hydrogen peroxide was 1260 yuan / ton, and the mainstream price fell more than 200 yuan / ton compared with the beginning of the month.

Shandong Province: Luxi Chemical 27.5% hydrogen peroxide 1160 yuan / ton; Shandong Haineng 27.5% hydrogen peroxide 1320 yuan / ton; the price is 200 yuan / ton lower than the beginning of the month.

Hebei Province: the ex factory price of 27.5% hydrogen peroxide in Zhengyuan fertilizer industry fell to 1300 yuan / ton, 100 yuan / ton lower than that at the beginning of the month.

Anhui Province: Anhui Jinhe 27.5% hydrogen peroxide price is 1500 yuan / ton; the actual transaction price is about 1300 yuan / ton; Anhui Quansheng 27.5% hydrogen peroxide price is 1300 yuan / ton, the price drops 200 yuan / ton.

Hunan: Hunan Shuangyang 27.5% hydrogen peroxide price is 1300 yuan / ton; the price is the same as that at the beginning of the month.

Zhejiang Province: Hangzhou Mingxin 27.5% hydrogen peroxide quoted price of 1500 yuan / ton, 100 yuan / ton lower than the beginning of the month.

 
Industry chain: since November, caprolactam has continued the decline of last month. The market of raw material cyclohexanone plunged, the market of terminal PA6 weakened, caprolactam lost money, the manufacturer reduced production and reduced load, and the price continued to decline. Since October, the price of caprolactam fell for two months in a row, and the price fell by more than 11%. As a result, the manufacturers are cautious in purchasing hydrogen peroxide, the supply of hydrogen peroxide is excessive, and the price keeps falling and rising. In some regions, the firm prices of manufacturers are relatively heavy, the prices are weak and stable, and the prices in Shandong, Anhui and Hebei have declined significantly.

Outlook for the future

Hydrogen peroxide analysts of the business club believe that: from November, when the cold winter of hydrogen peroxide comes, the demand is not good, and the negative air depresses. In the short term, the price of hydrogen peroxide is weak, and narrow range consolidation is the main thing.

I. trend analysis

According to the data monitoring of the business club, the cobalt market rose tentatively last week, after which the cobalt price was underpowered and fell in shock. As of November 22, the price of cobalt was 267500.00 yuan / ton, up 0.75% from the average price of 265500.00 yuan / ton on November 18; as of November 25, the price of cobalt was 265333.34 yuan / ton, down 0.06% from November 18. Last week, the cobalt market recovered to the pre rising level after a tentative rise.

II. Market analysis

MB market cobalt price

Time, category, specification, lowest price, up and down, highest price, up and down unit

11.22 standard cobalt 16.15-0.35 17.15-0.35 USD / lb

11.22 alloy cobalt 16.75-0.05 17.50 USD / lb

11.20 standard cobalt 16.5-0.3 17.50 USD / lb

11.20 alloy cobalt 16.8-0.4 17.5-0.2 USD / lb

11.15 standard cobalt 16.8-0.2 17.5-0.2 USD / lb

11.15 alloy cobalt 17.2-0.1 17.7-0.1 USD / lb

11.13 standard cobalt 17-0.2 17.7-0.1 USD / lb

11.13 alloy cobalt 17.3-0.3 17.8-0.3 USD / lb

© November 2019 business club www.100ppi.com

It can be seen from the table that in the near future, MB quotation fell slightly in shock, but the decline of cobalt price remained at around 0.2-0.3 for adjustment, and the international market cobalt price fell slightly in shock, which was negative for the cobalt market. Negative for domestic cobalt market, increasing downward pressure on cobalt market.

LME market March future cobalt price

It can be seen from the figure that in the past month, the cobalt price of LME futures fell in March, and the international market cobalt price fell, which created a negative impact on the domestic cobalt Market and increased the downward pressure on the cobalt market.

III. future prospects

Baijiaxin, data analyst of business agency, believes that last week, domestic cobalt market was affected by policies and Tesla’s production, resulting in a short-term rise in cobalt price, but the overall supply and demand of cobalt market has not been improved, the cobalt market is still in oversupply, and the momentum for the rise of cobalt market is insufficient. Last week, the international cobalt market reacted coldly, and the international cobalt price fell sharply, which poured cold water on the domestic cobalt Market with little upward momentum. After a small increase, the domestic cobalt price quickly fell back to the pre rising cobalt price, and there is still some downward pressure on the cobalt Market in the short term. Generally speaking, cobalt price is expected to fluctuate and fall slightly in the short term. In the long term, cobalt market is still optimistic, and cobalt price is still favorable in the long term. December may be the turning point of cobalt price.

I. price trend

According to the data monitoring of the business agency: as of November 26, according to the data of several sample quotation enterprises, the main quotation price of the n-propanol domestic trade market is about 10800 yuan / ton, which is generally stable compared with the beginning of the week.

II. Market analysis

Products: since last week, the market sales of n-propanol has been relatively stable. The overall market has been mainly shaken and consolidated, with little fluctuation. After a small fluctuation, the market continues to operate stably. People in the market mainly wait and see, and the cost surface can still be supported. The downstream demand of n-propanol is general, and the domestic production capacity basically reaches the supply and demand. At the beginning of last week (November 18), the quotation of some dealers in the domestic n-propanol market was slightly reduced, with a decrease range of around 100-200 yuan / ton. In the middle of last week (November 20), the quotation of domestic n-propanol dealers was revised back. After the correction, the price was stable to November 25, and on November 26, some dealers and traders again slightly revised back their quotation, with an increase range of around 140 yuan / ton. At present, the quotation is The manufacturer of propanol, Nanjing Rongxin Chemical Co., Ltd., has a stable quotation of 9100 yuan / ton (including tax for bulk water); the quotation of domestic dealers of propanol is around 10100-10800 yuan / ton. Compared with November 18 of the beginning of the week, the overall price is basically flat at the beginning of the week at the end of the week, including 10800 yuan / ton for Shandong Weiming chemical, 10800 yuan / ton for Dalian barrel in Taiwan The price is 11000-11600 yuan / ton, including 11800 yuan / ton of n-propanol quoted by Shanghai Lianyi Chemical Co., Ltd. imported from Dalian, Taiwan (specification: 165kg); due to dealers and traders’ reservation on the price, the price of the commodity is not easy to monitor, and the specific price is negotiated in a single document. In addition, the prices in each region are also different, so the price is only for reference.

Industry chain: since last week, ethylene has declined as a whole. Asian ethylene market prices fell, as of the end of last week, CFR Northeast Asia closed at $807-815 / ton, and CFR Southeast Asia closed at $808-814 / ton. Prices in the European ethylene market fell slightly. As of the end of last week, the price in the European ethylene market was FD, northwest Europe closed at $905-908 / ton, and CIF, northwest Europe closed at $810-821 / ton. The price of ethylene in the U.S. region rose. As of the end of the week, the price was US $484-496 / ton. Overall, the overall ethylene market fell. The industry pays more attention to the supply and demand after the festival.

III. future forecast

According to the prediction of the business agency: it is expected that the domestic n-propanol market will run smoothly in the near future, the overall demand of the market will remain stable, and the market will not fluctuate too much in the off-season.

I. overall trend

This week (11.18-11.22) polyethylene showed a weak downward trend, in which the average price of LDPE 2426h in East China monitored by the business agency was about 8175 yuan / ton; the average price of HDPE 5000S was about 7983.33 yuan / ton; the average price of LLDPE 7042 was about 7350 yuan / ton. As of November 22, the price trend of LLDPE in East China has stabilized this week, and the price of LDPE and HDPE has declined in a narrow range this week.

This week, the PE market (East China) fell 50-100 yuan / ton. At the beginning of the week, the linear futures rose in shock, and the international oil price rebounded after falling, which played a certain role in supporting the market. However, over the past weekend, petrochemical enterprises have accumulated inventory, increased supply pressure, continuously lowered prices, weakened market cost support, accompanied by shipping businesses, continued to purchase just in need downstream, and the overall market trading atmosphere is relatively light. In the later part of the week, with the continuous decline of petrochemical inventory, the pressure of market supply eased, and the rise of linear futures boosted, the market atmosphere of PE in the whole country improved slightly, the prices of major regional sales companies were basically stable, and many merchants actively reported high prices. At present, the downstream temporarily maintained on-demand orders, and the market growth still needs to be digested.

II. Market analysis

Upstream: after the fall of international oil price this week, the price of crude oil continues to rise, and the cost of oil-based polyethylene will increase. On Monday (November 18), WTI crude oil December futures settled at $57.05 a barrel, down $0.67/barrel from the previous trading day, with a trading range of $56.55-58.09; Brent crude oil January futures settled at $62.44 a barrel, down $0.86/barrel from the previous trading day, with a trading range of $61.94-63.57. On Friday (November 22), WTI crude oil futures settled at $57.77 per barrel in January 2020, down $0.81/barrel from the previous trading day, with a trading range of $57.50-58.74/barrel; Brent crude oil futures settled at $63.39 per barrel in January 2020, down $0.58/barrel from the previous trading day, with a trading range of $62.98-64.27/barrel.

Manufacturer’s trends: the inventory of downstream PE film manufacturers is low this week. Due to the limitation of terminal demand, the enthusiasm of manufacturers to enter the market is weak. For the time being, orders are received on demand, and the transaction is weak. Some areas are still under the influence of strict environmental inspection, the orders of enterprises are reduced, and the production is limited.

Futures trend: this week’s Liansu trend fluctuated upward. According to the monitoring of business club, on November 22, the opening price of main contracts of polyethylene futures l2001 was 7195, the highest price was 7240, the lowest price was 7155, the closing price was 7170, the former settlement price was 7130, the settlement price was 7195, up 40, up 0.56%, the volume was 390870, the position was 471228, and the daily position was increased by – 36612. (quotation unit: yuan / ton)

Import and export: about 1.3402 million tons of PE import in September 2019. Among them, the import volume of LLDPE is 40200 tons; the import volume of HDPE is 663400 tons; the import volume of LDPE is 276600 tons, and the total export volume of PE in September 2019 is 17200 tons.

III. future forecast

Looking forward to the future, business analysts believe that the current international oil price continues to rebound, which has a certain boost to the market. Linear futures rose slightly, spot market inquiries increased, and the market atmosphere improved. Petrochemical inventory continues to fall, and some plants are still in maintenance state, to some extent, to ease the supply pressure. However, the factory price of petrochemicals has been reduced, which weakens the market cost support. It is expected that the market may continue to fluctuate in a narrow range in the short term.

So far this year, U.S. refineries have cut crude oil processing by nearly 100 million barrels, mainly to cope with weak domestic and foreign demand, according to hydrocarbon processing network on November 22.

So far this year, crude oil processing has declined for the first time since the 2008 / 09 recession, according to the EIA.

So far, the crude oil processing capacity of U.S. refineries in 2019 is 16.61 million barrels / day, down from 16.91 million barrels in the same period in 2018.

The decline in crude oil processing is partly due to the closure of a 335000 barrels per day refinery in Philadelphia, on the east coast of the United States, following an explosion and fire on June 21.

This year, crude oil processing on the east coast of the United States dropped 138000 barrels (13%), and crude oil processing in the Gulf of Mexico and the West Coast dropped 147000 barrels (1.6%) and 54000 barrels (2.2%) respectively.

Compared with 2018, the processing volume nationwide in the United States decreased by 1.8%, with refineries on the east coast accounting for less than half of the total decline.

Refiners have cut crude oil production in response to falling demand for oil products to avoid overstocked excess inventory and lower margins.

In the eight months from January to August, U.S. refined oil consumption fell 1.0%, with gasoline down 0.5% and distillates down 1.2%.

From January to August this year, the total consumption of refined oil including imports fell 44 million barrels compared with the same period last year, the first decline since 2012.

In the first eight months of this year, U.S. refined oil exports also fell 30 million barrels, the biggest decline in more than two decades, reflecting weak demand for gasoline, residual fuel oil and petroleum coke abroad.

By limiting crude oil processing, U.S. refineries avoided gasoline and diesel surpluses, but created greater surpluses in the crude oil market, thereby supporting refining profits.

Influenced by the news that the organization of Petroleum Exporting Countries (OPEC) may extend the production reduction agreement, the international oil price once rose to the highest level in two months in a week, and then fell slightly.

OPEC and its partners may extend the agreement on production reduction of crude oil, which expires at the end of March next year, to June 2020, the media quoted anonymous OPEC officials as saying Monday. Although it seems unlikely to increase production reduction now, OPEC and its partners may send a message to the market to strengthen the implementation of the production reduction agreement.

The news stimulated the rise of international oil prices. On September 21, light crude oil futures in New York closed at their highest level since September 17, while Brent crude oil futures in London rose to their highest level since September 3.

According to the report released by JBC energy of Austria, it is not fundamentally surprising that OPEC anonymous said that the existing production reduction agreement may be extended to June next year. Given OPEC’s repeated willingness to balance the market, existing expectations already take into account OPEC’s agreement with its partners to cut production until the end of 2020.

Phil Flynn, a price futures group, said the market continues to underestimate oil demand. “In fact, oil demand is not only strong, but also this quarter’s growth is better than the previous quarter. With the implementation of multi-national economic stimulus measures and OPEC’s indication that it will extend the production reduction agreement, the whole oil supply system may be under supplied. ” He said.

JBC energy expects that the growth rate of global oil demand in the first three quarters of this year is only 460000b / D, which may be further reduced after relevant data from Canada and the United States are released. However, due to the low base in the same period last year, the year-on-year growth of global oil demand in the fourth quarter is still expected to reach 1.2 million barrels / day.

In addition, the new IMO fuel oil regulations for ships have resulted in insufficient supply of diesel oil.

According to the data released by oilfield service company this week, the number of active oil rigs in the United States was 671, down 3 on a month on month basis, down 214 on a year-on-year basis; meanwhile, the number of active oil rigs in Canada was 86, down 2 on a month on month basis and 38 on a year-on-year basis.

US strategic crude oil reserves last week fell 1.972 million barrels from a month earlier, the biggest decline in seven consecutive weeks, according to the US energy information administration. Market participants expect crude oil demand to remain at a high level as the year-end shopping season arrives.