Price Trend

Lead market (09.16-09.20) fell this week. The average price in domestic market was 17362.50 yuan/ton at the beginning of the week, and 16862.50 yuan/ton at the end of the week. The weekly decline was 2.88%.

On September 20, the lead commodity index was 102.62, up 0.26 points from yesterday, down 23.42% from the cyclical peak of 134.01 (2016-11-29), and up 37.51% from the lowest point of 74.63 on March 19, 2015. (Note: Period refers to 2011-09-01 to date).

II. Market Trend Analysis

Domestic market: This week spot lead market and Shanghai lead trend all the way down, the mainstream trading range is 16775-17400 yuan/ton, spot cumulative weekly decline of about 500 yuan/ton. The market is willing to ship goods. As of Friday, the mainstream quotation of domestic lead brands will be 20 yuan per ton of water discount to 20 yuan per ton for 1910 contract. The downstream mentality of prudent on-demand purchasing, trading is still acceptable, mostly long single-based, light bulk single transactions, market brand lead is Jinsha, South, Wanyang, Mulu, etc.

Domestic events:

ILZSG: The global lead shortage in July was 4,200 tons: London, September 18, 2008. According to data released by the International Lead and Zinc Research Group (ILZSG), the global lead supply gap narrowed to 4,200 tons in July and 13,100 tons in June. In the first seven months of 2019, the global lead supply gap expanded to 47,000 tons, compared with a shortage of 35,000 tons in the same period last year.

WBMS: The global lead supply gap in January-July 2019 is 177,000 tons: London, September 18, 2019. According to data released Wednesday by the World Bureau of Metal Statistics (WBMS), the global lead supply gap in January-July 2019 is 177,000 tons and that in 2018 is 265,000 tons. By the end of July, the total stock was 27,000 tons lower than that at the end of 2018. Unreported inventory changes are not included in consumption statistics. From January to July 2019, global refined lead production (primary and recycled) was 7.329 million tons, an increase of 11.70% over the same period last year. China’s apparent demand is estimated to be 3.577 million tons, an increase of 782,000 tons over the same period last year, accounting for about 48% of the global total. Apparent demand in the United States fell by 11,000 tons from January to July 2019. In July 2019, the output of refined lead was 105.27 million tons and the consumption was 105.74 million tons.

Non-ferrous industries: This week, the US dollar index shook in the high range of 98.2-98.6, the British break-off event further fermented the pound plunge, the Federal Reserve expected to cut interest rates by 25 basis points, a partial hawk, the US dollar high was stable, triggering market fears about the weakening of the global economy; Saudi Arabia said after the attack that it would soon resume production, crude oil rushed back to high. The basic metals fall accordingly.

3. Prospects for the Future Market

Next week is the last trading week before the National Day holiday, and there are long orders delivered in the first half of the week. With the approaching week, the pre-holiday hedging mood will gradually increase. Whether spot or futures, hedging and bagging will be the main safety, and the market will be characterized by rising first and then falling.

Saudi oil fields and refinery facilities were attacked

A few days ago, market sources said that after the attack on Saudi Arabia’s oil facilities on September 14, concerns about the supply of raw materials in the Asian olefin and polymer markets had become increasingly apparent.

Prince Salman, Saudi Arabia’s new energy minister, said that on the morning of September 14, a drone attack on Abqaiq oil processing facility and Khurais Oilfield by Saudi Arabian Oil Corporation (Saudi Amy) resulted in a reduction of about 5.7 million barrels a day, equivalent to half of the company’s capacity.

Saudi Petrochemical Raw Material Outage

A number of Saudi petrochemical companies announced the interruption of raw material supply after the attack. These petrochemical companies are: Sipchem, Advanced Petrochemical Company, Tasnee, Yansab, Saudi Kayan Petrochemical Company and SABIC. The petrochemical companies announced a 30% to 50% disruption in raw material supply.

Saudi Arabia is a major player in the global ethylene and ethylene derivatives market, because most petrochemical enterprises in the country use ethane as the main raw material, and ethylene production is high.

Data show that Saudi Arabia’s annual ethylene production capacity is about 17.5 million tons, accounting for about 9% of global total production. Saudi Arabia’s total annual production capacity of polyethylene is about 9 million tons, accounting for about 8% of global production capacity.

At the same time, Saudi Arabia is also a major methanol exporter in Asia, with methanol production capacity of 6.55 million tons per year. According to Chinese customs statistics, Saudi Arabia exported about 795493 tons of methanol to China in 2018, accounting for 11% of China’s total methanol imports.

Ethylene and Propylene Price Rising

An ethylene trader believes that the popularity of the Asian ethylene market will rise, but it is not yet clear how far it will rise. Some market sources also said that the Malaysian Border Garland Refinery and Petrochemical Company expects to restart naphtha-based steam cracking units in a few weeks, which may offset to some extent the negative impact of the attack on Saudi oil fields.

Standard & Poor’s Global Prussian Energy Information Company has previously said that Biancalan Refinery and Petrochemical Company plans to restart the cracking unit in the RAPID Refinery-Petrochemical Complex in Johor in mid-September. The cracking unit produces 1.2 million tons of ethylene annually.

Among the three main olefin products, propylene is most susceptible to interruptions in crude oil and refinery operations, as propylene is produced by fluidized catalytic cracking units in refineries. Meanwhile, propylene sellers are cautious. “So far, we’re watching, but prices are bound to rise,” said a Japanese trader.

Pay close attention to naphtha Market

Market participants are paying close attention to the naphtha market, as a bull market is expected for naphtha, which may reduce the already weak profit margin of the petrochemical industry.

A naphtha trader said: “The reason for the surge in naphtha prices last Monday morning is that a lot of naphtha in Asia comes from the Middle East.” According to Prussian Energy Information, the average Prussian naphtha swap was more than $500 per ton last Monday.

According to market participants, Saudi Arabian Ami Trading Company exports 50,000 to 75,000 tons of naphtha to the Northeast Asian market every month from Yanbu Petrochemical Company, located on the Red Coast of Saudi Arabia. In addition, Saudi Arabia Amy Trading Company also exports naphtha directly from Labige Petrochemical to Northeast Asia.

Saudi Arabia is restoring production capacity, the United States also said it would consider putting strategic reserves in the future, after the multi-factor is digested, under the influence of weakening consumption, futures prices will come down under pressure.

During the Mid-Autumn Festival, armed air strikes on two oil facilities in Saudi Arabia led to a re-crisis in the Middle East. Affected by this, crude oil futures prices at home and abroad fluctuated sharply last week. Among them, WTI oil prices in the United States once soared to $63.38 per barrel, and Brent oil prices rose back to $68.31 per barrel, the biggest one-day fluctuation in 28 years.

It is no longer profitable to speculate about Saudi Arabia’s failure to supply

Yemen’s Hussein armed forces attacked two important oil production facilities in Saudi Arabia using UAVs, which belonged to the “black swan” incident in the market. The subsequent damage to Saudi output of 5.7 million barrels per day was digested in a one-time manner in the trend of international oil prices soaring in early Monday morning. In terms of follow-up development, in response to short-term global supply shortages, the Saudi energy minister said that Amy was trying to restore production, restoring 1.9 million barrels per day production on September 16, or one third of the reduction, and restoring the remaining two-thirds of the damaged production before the end of September. During the recovery period, Saudi Arabia will compensate its customers through existing reserves to ensure that global supply will not be interrupted. Despite the stabilizing elements of the above remarks, as the world’s largest oil producer, it has ample strength to convince most investors that it would be unprofitable to continue speculating about the disruption of Saudi Arabia’s supply. Perhaps some people think that the armed attack on Saudi Arabia by Yemen Hussein was in retaliation for its interference in the Yemeni civil war. At the same time, the figure of Iran shines behind the armed Hussein. The “proxy” war reflects the deepening political game between the United States and Iran in the Middle East, which means that similar incidents will happen in the future. However, the author believes that Saudi Arabia, which has experienced a painful lesson, will inevitably improve its defensive capability and prevent the occurrence of the second crisis.

The United States has more than one billion barrels of reserves

The U.S. crude oil reserves are divided into government strategic reserves and commercial reserves. As of the week ending September 13, 2019, the U.S. strategic reserves were about 645 million barrels, while commercial inventories exceeded 417 million barrels, totaling 1.062 billion barrels. It is understood that only the President of the United States has the right to use strategic reserves. Within 15 days after the announcement, strategic reserves of crude oil must enter the market with an output capacity of 4.1 million to 4.4 million barrels per day. Referring to the case of U.S. strategic reserve during the 1990-1991 Gulf War, the international crude oil price dropped from $36.73 per barrel to $18.35 per barrel in the context of the joint use of crude oil reserves by the United States and the International Energy Agency. At that time, it was not expected that the international oil price would rise sharply. After the attack on Saudi Arabia, US President Trump immediately said that he wanted to release strategic reserves and that the emergency response mechanism was more timely and accurate than the previous one. There is reason to believe that the top of this oil price rise will occur earlier than in 1990.

The market will enter the accumulation stage

After the end of Labor Day in early September, the summer peak of driving oil in North America will also end, gasoline consumption will weaken, and refinery start-up rate will gradually decline. According to statistics, from 2014 to 2019, the start-up rate of refineries in the United States began to decline in early September, until the end of mid-October. In the week ending September 13, the start-up rate of refineries in the United States was 91.20%, with a 3.90% decrease in the circumference-to-circumference ratio. Although it was at a high level in the year, it had declined somewhat, with obvious seasonal regularity. At the same time, US commercial crude oil inventories are bottoming out at this stage of the year. From 2013 to 2019, U.S. commercial crude oil stocks reached the end in mid-September, then entered the accumulation stage, until the peak in mid-November. As of the week ending Sept. 13, US commercial crude oil stocks stood at 417 million barrels, down by 271 million barrels from the June 7 high, but above the six-year average. With the arrival of seasonal replenishment cycle, the accumulation of crude oil stocks is expected to increase.

To sum up, the attack in Saudi Arabia raised concerns about the shortage of crude oil supply. With Saudi Arabia’s recovery of damaged capacity as soon as possible and the expectation of the United States putting in reserves, the market recovered. Oil prices are facing the risk of sustained decline after the seasonal off-season of crude oil demand.

By the end of September, urea prices did not meet the expectations of the public and helplessly re-emerged after the rise and fall situation, Shandong Lianghe Shanxi, Jiangsu and Anhui factory quotations fell not much, the cumulative decline of 20-40 yuan/ton, transaction prices fell sharply! The receiving price of urea in Linyi Compound Fertilizer Plant dropped from 1860-1900 yuan/ton before the Mid-Autumn Festival to 1810-1820 yuan/ton on September 17, then rose slightly to about 1830 yuan/ton, and fell again to 1810-1820 yuan/ton by September 23.

Urea prices have been reversing over and over again, so what should we do with the distributors who want to take the goods for winter storage?

Cold! Hee-hee, make a joke. To return to the truth, this article will briefly analyze the urea winter storage market this year from the aspects of picking up the goods, when to pick up the goods and not preparing for the winter storage.

Suppose we have taken urea for winter storage, that is, when the price of the first two or three times “suspected bottom”, what should we do? One way is to sell part of the product when the price rises and there is a certain profit. The other way is to slow down the resale or carry out a longer-term reserve for distributors who take goods near 1 700 yuan/ton of Shandong, 1 650 yuan/ton of Shanxi and 1 500 yuan/ton of Inner Mongolia. The premise is not to take into account storage costs, capital interest and so on.

For distributors who are considering winter storage, Zhongfei’s suggestion is that they can get a small or moderate amount of goods when they meet super-low prices or meet our psychological expectations. So when is the best time to store urea in winter? Which is the time point at which the next price bottoms?

First of all, we have to admit that the trend of urea price in the second half of this year is totally different from the previous two years, neither rising all the way from late August in 2017 to spring, nor rising all the way from early August in 2018 to the end of November. The trend of urea price in the second half of this year is rising from July to August-September. The three time. The pace of winter storage operation has been disrupted, unable to refer to the previous two years, after all, this year’s supply and demand situation is different.

As far as the demand is concerned, it is well known that due to the poor economic environment, the demand for urea in domestic industrial plywood factories and power plants decreases again and again. In the aspect of industrial direct fertilization, the amount of direct application of urea has been reduced due to the substitution of high nitrogen compound fertilizer, formula fertilizer, nitrogen and potassium topdressing, extruded granular ammonium chloride and ammonium sulfate. Fertilizing directly or into multiple compound fertilizers and then fertilizing, the total return of urea is needed. The demand for urea and the price support of industrial compound fertilizer plants are very strong.

On the supply side, a factory in Inner Mongolia has been put into operation since the end of 2018, a factory in Shandong has increased its load since the middle of 2018, and a large factory in Shanxi has been carrying out full load for a longer time since 2018. In spring 2019, the time for urea manufacturers in Southwest Inner Mongolia to resume production is ahead of the previous year. In view of the high urea profit in these two years, many urea manufacturers in Southwest Inner Mongolia have made great progress. High-load production by factories has made the time of urea production in China reaching 150,000 tons or more per day longer than 160,000 tons. Since April this year, urea production in China has been basically more than 150,000 tons per day (except in late August). It is recalled that the daily production of urea before that was more than 150,000 tons or in spring 2017 and July 2016. Go ahead (at that time, the daily output was more than 160,000 tons or even as high as 200,000 tons). In short, urea has returned to a slightly oversupply, which is about to reach a more obvious oversupply, i.e. the need for exports to ease domestic pressures.

Secondly, the low price reduction of export volume makes the winter storage operation of our dealers more difficult. Export is a double-edged sword. When domestic and international prices are higher, export is the icing on the cake. When domestic and international prices are low, export is a blow. For example, the label that ended on September 13, which is 260 US dollars per ton offshore, and the price of urea from China to Yantai Port is as low as 1750 yuan per ton. The shortfall is that China’s export volume of goods may be only 100,000 tons, the price and quantity are hit. After all, if the export situation is good, then the domestic inventory situation will be moderate, and the price is expected to rise significantly after the winter storage. Our distributors should consider increasing the quantity of winter storage appropriately when the export has improved markedly.

Thirdly, the best winter storage time, of course, can not be said to be the best time to pick up goods. First, before National Day 11, urea manufacturers need to consider the order and transportation status of goods for more than half a month before and after National Day. They can pick up a small amount of goods at the time of low-cost purchase orders. Second, after the holidays, industrial demand or export. If demand for urea is still lagging behind, urea prices may have new lows. After all, by the end of October, the compound fertilizer enterprises will start to store and collect money in winter and produce fertilizer in winter. In November-December, according to the cold weather or not, according to the situation of civil coal and natural gas, the start-up of coal head, especially gas head urea enterprises will be limited to a certain extent, and the daily output of urea is expected to be less than 140,000 tons. Even 130,000 tons, urea prices are expected to rise to some extent.

Finally, in the general economic environment, urea prices are difficult to rise dramatically, or will be repeated after the rise. As for winter storage, a small amount or an appropriate amount of goods can be taken, otherwise it will face greater risks.

According to the price monitoring of business associations, domestic PTA spot market prices rebounded slightly. As of September 23, the average market price was 518 yuan/ton, up 0.17% from the previous trading day, down 35.28% from the previous year. PTA main futures rebounded and closed at 5176 yuan/ton, up 34 yuan/ton, or 0.66% from the previous trading day.

Due to the support of processing fees and the expectation of PTA plant maintenance, the price is favorable, and the trading atmosphere has been improved. Polyester factories are the main purchasers. In terms of equipment, Huabin Petrochemical’s 1.4 million tons PTA plant stopped on September 20 and planned to be repaired for about 5-6 days. The domestic PTA plant load was reduced to about 93%. Specifically:

Enterprise Name, Capacity, Device Dynamics
Jialong Petrochemical Co., Ltd. Parking overhaul on Aug. 2, restart pending
Chuaneng Chemistry 100 Sept. 18 Parking overhaul, scheduled for one week
Pengwei Petrochemical Parking Overhaul on September 19th, scheduled for one week
Huabin Petrochemical Stop on September 20, 140, planned maintenance for about 5-6 days
Hengli Dalian 220 is scheduled to be overhauled for 15 days in early October
Hanbang Petrochemical 60 plans to be overhauled in October
Honggang Petrochemical 150 plans to be overhauled on October 14
On the PX side, the closing price of Asia PXCFR in China on the 20th was US$804 per ton, which was flat compared with the previous trading day. The price trend of domestic PX market remained at 6,600 yuan per ton. Urumqi Petrochemical Plant started 50%, Fuhai Creative Aromatics Plant started a line, CNOOC Huizhou Refinery and Chemical Plant overhaul, Hengli Petrochemical PX Plant put into operation, other devices temporarily run stable, due to the new device put into operation PX market price trend remains weak and stable.

The fluctuation of raw material prices and the low peak season of traditional textile industry of “Jinjiu” resulted in a slight drop in polyester start-up load to about 88%. The production and marketing of polyester filament in Jiangsu and Zhejiang provinces were general. Some mainstream factories increased their profits and reduced their quotations by 50-100 yuan/ton. Among them, polyester POY (150D/48F) was reported at 7750-8150 yuan/ton and DTY (150D/48F) was low. The projectile is 9150-9450 yuan/ton and the FDY (150D/96F) is 7800-8150 yuan/ton.

Business analyst Xia Ting believes that although the current PTA device load has been reduced, it is still at a high level. Although the downstream is approaching the end of the month, the mood of polyester factory’s stock-up is general, and there are expectations of National Day holidays in some terminal enterprises, and winter orders have not improved significantly. Overall, positive support is still insufficient, and PTA is expected to weaken in the short term.

Crude oil prices soared 14.7% the previous day and plunged 5.7% the following day. The crude oil market has opened a pattern of sharp rise and fall. How about the chemical industry downstream? On September 20, the Styrene Futures Contract and related rules were officially announced. As an important chemical product downstream of crude oil, the styrene market is undoubtedly facing tremendous fluctuation risk.

China is the largest styrene producer and consumer in the world. The large fluctuation of upstream price makes the situation of domestic styrene industry chain more severe, the profit of production enterprises declines, and the profit space of industry chain is compressed. It coincides with the upcoming listing of styrene, the 70th derivative product in China’s derivatives market on September 25. With questions, the Securities Times interviewed relevant styrene production and trading enterprises to understand the specific situation.

The fluctuation risk of chemical industry is increasing, and the average amplitude of styrene is more than 50%.

China is the largest styrene producer and consumer in the world. In 2018, there were 45 styrene production enterprises in China, with annual capacity of 9.26 million tons and output of 7.68 million tons, accounting for about 25% of the world.

“The fluctuation of crude oil price will drive the change of downstream styrene price.” Zhu Shunlin, general manager of Lishde Chemical Industry in Jiangsu Province, said that the price fluctuations of styrene in recent years were very obvious. From 2015 to 2018, the price fluctuations of styrene market were 68.4%, 55.7%, 48.8% and 66.7% respectively. Taking 2017 and 2018 as examples, the price difference between high and low points of styrene in 2017 is nearly 4000 yuan/ton, and that in 2018 is more than 6000 yuan/ton.

Zhu Shunlin admitted that the impact of crude oil fluctuations on the styrene industry is huge, most typical in 2008 and 2014. Crude oil prices plunged from $147 to more than $30 in 2008, causing many chemical companies to shut down production. The same was true in 2014, when crude oil fell sharply, styrene prices fell at the waist and the industry changed dramatically.

In addition to the upstream crude oil price, as a part of the chemical industry in the middle reaches, there are many factors affecting the price of styrene. Not only the upstream crude oil, ethylene, pure benzene and other varieties will be affected from the supply side, but also the downstream demand of EPS, PS and ABS products will have an impact on the price of styrene.

Especially, after 2019, domestic styrene ushered in a wave of capacity expansion, with more than 500,000 tons newly built, especially 1.2 million tons of Zhejiang Petrochemical Company and 720,000 tons of Hengli Petrochemical Company. From 2019 to 2023, the planned production units reached 2.7 million tons annually, and domestic supply tended to be excessive.

“Over the past four or five years, domestic styrene production capacity has been growing slowly, demand has been growing steadily and steadily, the industry is in a tight balance cycle, and the production enterprises have made high profits.” However, with the average output growth rate of 21% in the past three years, the current situation of the styrene industry chain is becoming more and more serious, the supply-side increment is large, the profits of the production enterprises are declining, and the profit-sharing space of the industry chain is compressed.

Wang Wenlin, futures analyst of Zhejiang Merchants, said that from the perspective of upstream raw materials, crude oil prices fluctuated sharply and the risk of styrene cost-side fluctuated significantly, while the domestic chemical industry, including styrene, put more production capacity into the industry itself, and the supply pressure was high, and the downstream demand slowed down obviously, resulting in the reduction of profits in the entire chemical industry. The demand of producers and traders to lock in prices to avoid risks or optimize industrial profits will be significantly increased.

There is a huge fluctuation space in the styrene market, and contract trading is the main part of spot trade. Once the two parties sign the contract, some traders will suffer heavy losses due to breach of contract. The market urgently needs effective hedging management tools to optimize the operation of the market.

Zhu Shunlin said that the mainstream pricing method of domestic styrene spot is to use Anxun’s quotation as a reference, mainly monthly settlement, mostly RMB quotation. In previous years, the contract price will refer to Jiangsu regional price and CFR China main port price. The data show that the production capacity of East China, such as Jiangsu, Zhejiang and Shanghai, accounts for about 45% of the total production capacity of the whole country, and is the largest area of styrene production in China. In 2018, the regional output exceeded 3 million tons, accounting for more than 40% of the total output of the whole country.

“The acquisition method of Anxun’s quotation, mainly through telephone consultation, market verification and other means, determines the daily quotation, and then calculates the average monthly price through average calculation.” Gu Sumin, manager of Shanghai Secco Petrochemical Business, said. It is understood that the current domestic styrene industry sales mode, basically based on monthly quotation. This is somewhat similar to the Prussian price on the spot iron ore market. Price is also determined by telephone inquiry, market verification and other means of daily quotation.

At the same time, in recent years, the price operation system of Huaxi Village’s electronic disc and paper goods exists in the domestic market of styrene and other chemical products, and many domestic private enterprises have tried to diversify their sales methods to meet the multi-level needs of customers by means of electronic trading and pre-sale products in spot market. Including Shandong Huaxing, Yuhuang Chemical and other enterprise e-commerce platforms have been put into commercial operation successively, selling products through commercial platforms, and even using competitive bidding in commercial platforms, adjusting prices automatically according to market supply and demand.

The interviewees pointed out that, compared with mature markets such as the United States, China is different in that there are 67 producers with a capacity of 56 million tons in the United States, while there are basically 3 million tons in Korea and Japan, that is, 35 producers. In China, there are about 40 manufacturers in the capacity range from 7 million tons to 9 million tons. In addition, the number of traders in chemical industries such as styrene is even larger.

A large number of market participants also provide rich soil for multi-level price operation. Drawing on the successful experience of other commodity sectors, it is clear that styrene also needs a futures market with large capacity and high credit to provide services for enterprises. “With the listing and operation of ethylene glycol, the customer base of styrene futures will be better, and enterprises involved in ethylene glycol trading have also done styrene.” Zhu Shunlin said.

It is noteworthy that in addition to the above background, styrene futures have been given a new role: styrene futures will be the 70th derivative on the commodity stage of our country, dedicating to the 70th anniversary of the founding of New China. Since the first standardized futures contract, aluminium futures, was listed in 1992, China’s derivatives market has been growing in variety and service areas, covering agriculture, energy, chemical industry, metals and finance, serving the whole chain of risk management and pricing trade from production to sales.

Behind the development of derivatives market is the increasing demand of real enterprises to manage the risk of price fluctuation since the market-oriented reform. “In September 2008, the price of styrene was around 11,000 yuan/ton, and then continued to fall within a month, with a minimum of about 4,800 yuan/ton. At that time, there were not many ways to manage risks, and the awareness of risk prevention and control was limited, so we could only sell the goods. The lower the price of the goods sold, the lower the price of the goods sold. Zhou Jun, deputy general manager of Nantong Chemical Light Industry Company, said frankly.

After the ups and downs of marketization, the real enterprises gradually realized that the management of market risks not only need to improve their management, but also need the help of derivatives. Take the chemical industry as an example, Nantong Chemical Light Industry has participated in methanol and ethylene glycol futures trading before, and is the ethylene glycol futures delivery warehouse, which is more in-depth in the aspect of the combination of futures and cash. Shanghai Secco, Yibin Tianyuan, Ningxia Inliter and other production and processing enterprises also participated in the trade of chemical futures such as LLDPE and PVC very early. Some enterprises’products have also become designated delivery brands of exchanges, playing an active role in the futures spot market.

With styrene futures as a new starting point, the derivatives market will serve the real economy more broadly. “The listing of styrene futures is not only conducive to the stable production of upstream enterprises, but also enables downstream enterprises to have good risk management tools to escort the smooth operation of enterprises. Similar to other chemical futures, it can derive pricing products such as option basis, enrich the means of enterprise sales and procurement, and ultimately serve the real economy. Purpose. ” Zhu Shunlin said.

Last weekend, a crude oil processing plant and oil field in Saudi Arabia were attacked by UAVs, which disrupted an average domestic production of 5.7 million barrels a day. This also directly led to the price of Brent crude oil soaring by nearly 12%, the highest one-day increase since the 1991 Gulf War. The surge of crude oil directly led to the rise of domestic chemical products. The main contract of MEG in 2001 touched the floor for two consecutive trading days. However, with Saudi Arabia declaring that all production capacity would be restored by the end of this month, oil prices quickly reversed nearly half of the previous increase, which directly contributed to the fall of MEG prices. Therefore, we believe that ethylene glycol will return to the fundamentals after the crude oil storm. First of all, at this stage, ethylene glycol production enterprises have returned to profitability. Secondly, the start-up rate will increase steadily after the National Day holiday, and a number of new devices at home and abroad will be put into operation in the fourth quarter. Finally, downstream polyester demand will enter the off-season. Therefore, the probability of gradual decline of MEG high is higher.

Operational Suggestions: Single Short Main Contract 2001

Ethylene glycol enterprises have returned to the later stage of profit competition intensified

Under the background of large-scale expansion of production, especially the centralized production of domestic integrated refining and chemical plants, the competition in the domestic ethylene glycol market will obviously intensify, which will lead to a long-term loss situation for the production enterprises, thus eliminating some backward production capacity and realizing full competition in the market. Since the end of March this year, the cash flow of naphtha-based MEG has been at a negative level for a long time, which has led to the decline of the start-up rate of domestic and foreign MEG manufacturers and the continuous reduction of domestic stocks in East China ports. However, with the recent sharp rise in the price of ethylene glycol, both naphtha-based MEG and ethylene-based MEG began to make profits, which will inevitably lead to the re-intensification of competition among the later processes.

Ethylene glycol start-up rate will gradually increase the new plant will be put into operation one after another

In the case of sustained losses, the start-up rate of domestic ethylene glycol production enterprises has gradually declined since the end of March, and the start-up load of coal-based ethylene glycol once fell below 50%. However, with the obvious improvement of profit situation, according to the current spot price of ethylene glycol, coal-based ethylene glycol enterprises have begun to make profits. Recently, a number of units have announced plans to restart or load up, such as 300,000 tons per year for Xinhang Energy, 200,000 tons per year for Henan Energy (Yongcheng) and 200,000 tons per year for Yangcheng Coal. In addition, after the National Day in Tianying, Xinjiang, Henan Energy (Anyang) and Henan Energy (Xinxiang) still have the start-up plan. The above-mentioned re-production devices can provide 80,000-100,000 tons/month of additional supply and output. At present, the start-up rate of domestic ethylene glycol enterprises has seen a bottom rebound. In addition to the restart of existing devices, the process of putting new devices into operation is also gradually advancing. The 750,000-ton MEGlobal plant in Texas, USA, is scheduled to start production in November, and its main destination is China. Zhejiang Petrochemical Co. Ltd. and Hengli Petrochemical Co. Ltd. are expected to put into operation in the fourth quarter of this year. The domestic production capacity of ethylene glycol will increase rapidly, and the supply pressure can not be ignored.

Downstream polyester demand will weaken after the seasonal peak season

According to the traditional consumption habits, September and October are the seasonal peak season of domestic polyester demand. Especially in the case of better production profits of early polyester enterprises, the start-up load of enterprises remains high, but the overall level is lower than the same period last year and it is difficult to improve again in the near future. More importantly, with the recent rise in PTA and MEG prices of raw materials, the profits of polyester enterprises have declined significantly, which may lead to an earlier weakening of their demand.

Price trends:

Since September, the domestic caustic soda market has rebounded, and the atmosphere of price increase is strong. So far, it has seen the largest increase this year, with an overall line of 150-300 yuan/ton. According to the monitoring of the business associations in Shandong, the price of caustic soda in Shandong is on the whole going, up to 850 yuan per ton in September, up by 20.57%.

Products: At present, caustic soda in most areas is still on the upward trend. Manufacturers stop production and limit production more, mainstream factories have overall low inventory. For business associations, 32% of ionic membrane caustic soda in Shandong is above 840 yuan/ton, 50% of ionic membrane caustic soda mainstream transaction price rises to 1410-1430 yuan/ton; for Jiangsu, 200 yuan/ton or so this month, 3. The mainstream transaction price of 2% ionic membrane alkali has risen to 900-950 yuan/ton, and that of 50% ionic membrane alkali has risen to 1450-1500 yuan/ton. This month, the price of 32% ionic membrane alkali purchased by Weiqiao has risen by 100 yuan/ton to 750 yuan/ton, which has a great impact on the local area.

Up to now, the closing of the national market offers are as follows:

region   Specifications   offer    Ups and downs
32% Ionic Membrane Base 950+150 in Hebei Province
32% ionic membrane base 950 + 80 in Northeast China
32% ionic membrane base 850 + 180 in Shandong area
32% ionic membrane base 920 + 200 in Jiangsu area
32% ionic membrane base 980 + 250 in Zhejiang area
32% ionic membrane alkali 900 + 180 in Anhui area
Since September, the caustic soda market has gone up a large margin, the main reasons are as follows:

1. The National Day is approaching. There are many rumors that the chlor-alkali industry in North China is going to stop work. At present, Shandong has limited production, no stock of industrial caustic soda is not guaranteed, and more enterprises in Jiangsu and Zhejiang are shut down. After the 25th, the liquid chlorine embargo in Shandong, Jiangsu, Anhui, Zhejiang and North China, as well as downstream and traders, will be imposed. In order to prevent the alkali plant from being restricted by liquid chlorine embargo, goods were taken one after another.

2. After the notification of the liquid chlorine embargo which began on September 7 in Jiangsu, the atmosphere of liquid chlorine became tense, and the Anbang load dropped to 30%. It is known that some of the liquid chlorine in Jiangsu has also been sent to Anhui and Zhejiang outside the province. The news of the liquid chlorine embargo is also one of the factors stimulating the increase in alkali prices.

3. The purchase price of Weiqiao alumina has been stable for more than five months. The manufacturers have increased retail prices on National Day to stimulate Weiqiao’s price increase, and the main factories in Shandong Province are not satisfied with the start of construction after the early typhoon. The purchase support of Weiqiao alumina and the inventory have been in a controllable level. After the increase of the purchase price of Weiqiao, the credit of the traders has been greatly boosted. Heart.

Business analysts believe that the market price of liquid alkali in North China will maintain a high level before National Day, and the market performance in East China and Henan is also relatively good, while the domestic market of liquid chlorine will mostly maintain a steady trend. 32% ionic membrane alkali in Shandong province 840-880 yuan/ton. But in October, the environmental protection inspection will be strengthened, the whole industrial chain of the manufacturer will be restricted, the downstream parts of the north and the main alumina will also face production reduction, a large number of sea alkali will arrive in the South during the National Day, low-cost sea alkali will stimulate the southern liquid alkali market, the national market after the National Day or will have a greater impact in the future. End price may not be guaranteed.

Price Trend

In September, the domestic liquefied natural gas market improved due to the northwest gas limit, and with the end of the 10-day gas limit, the price of LNG resumed its decline. The average price of domestic LNG market on the 10th day was 3030 yuan/ton, and the average price on the 19th day was 2900 yuan/ton. Within ten days, the price fell by 4.29%, 35.56% compared with the same period last year.

II. Analysis of Influencing Factors

Products: According to the data of business associations, as of September 19, the LNG price of Inner Mongolia Ordos Xingxing Energy Co., Ltd. was 2950 yuan/ton, and that of Inner Mongolia Etok Qianqi Shitai Natural Gas Co., Ltd. was 2850 yuan/ton. The LNG price of Zizhou LNG Plant of Shaanxi Luyuan Natural Gas Co., Ltd. is 3000 yuan/ton, that of Xinjiang Guanghui LNG Development Co., Ltd. is 2300 yuan/ton, that of Qinshui New Olympics LNG is 3150 yuan/ton, that of Shaanxi Zhongyuan LNG Co., Ltd. is 2900 yuan/ton, and that of Qinghua Energy Group of Xinjiang is 2500 yuan/ton. LNG Company Limited is priced at 2900 yuan per ton. Local liquid prices have fallen to low levels.

Market analysis: In recent ten days, the domestic LNG market has continuously lowered prices. The northwest gas limit ended on September 10, and the market has resumed normal supply. Major manufacturers are preparing for the pre-festival warehouse and lowering the liquid price one after another. Under the guidance of downstream demand, in order to alleviate the pressure of shipment, liquid factories have sought a favorable price reduction. Individual factories have made great efforts to reduce the price, with partial inverted shipment phenomenon. During the Mid-Autumn Festival, transportation was blocked, and shipments from liquid factories in some areas were not smooth and prices were continuously lowered. After the holidays, the restrictions on high-speed and dangerous chemicals transportation were lifted, the demand situation was still unclear, the terminal demand was not improved, the upstream bid was difficult, and the liquid factory continued to reduce the price in order to maintain normal shipment. At present, the downstream demand is flat, the wait-and-see atmosphere is strong, the supply exceeds demand situation is still strong, and with the rising import LNG prices, it will bring certain benefits to domestic LNG. In addition, the upstream factories are forced to reduce production costs, and the wait-and-see mentality is growing. LNG stops falling and returns to stability, and the trend is still weak.

Industry: According to the price monitoring of business associations, in the 36 weeks of 2019 (9.9-9.13), there were 6 kinds of commodities in the energy sector rising annually. The top three commodities were gasoline (1.24%), methanol (1.06%) and diesel (0.98%). There are seven kinds of commodities that have declined annually. The first three products are dimethyl ether (-2.95%), liquefied natural gas (-2.30%) and WTI crude oil (-1.36%). Average gains and losses this week were -0.29%.

3. Future Market Forecast

Liquefied Natural Gas analysts of business associations believe that the current market demand is inadequate. With the end of the Northwest Gas Limitation, the situation of supply exceeding demand remains unchanged, and the LNG market returns to normal. In addition, near the National Day, demand in some areas is more reduced, or it may affect liquid prices. LNG prices are expected to be dominated by weak consolidation in the short term.

Price Trend

According to the monitoring data of business associations, the market price of domestic chlorinated paraffins has risen continuously since September. On September 4, the average price of domestic chlorinated paraffin 52 grade I products was 4933 yuan/ton, and on September 19, the average price of domestic chlorinated paraffin 52 grade I products was 5200 yuan/ton. The half-month price rose by 5.41%.

II. Market Analysis

Products: At present, the ex-factory quotation of chlorinated paraffin 52 first-class products in South China is 4600-5300 yuan/ton, that of chlorinated paraffin 52 first-class products in North China is 4000-5500 yuan/ton, that of chlorinated paraffin 52 first-class products in East China is about 5000 yuan/ton, that of chlorinated paraffin 52 first-class products in Central China is about 5000-5500 yuan/ton, and that of Northeast China is about 5000-5500 yuan/ton. The price of chlorinated paraffin 52 grade I product is 5000-5500 yuan/ton. The quotation for the first grade chlorinated paraffin 52 in Shandong is about 5000-5500 yuan/ton. The northwest region chlorinated paraffin 52 first-class product ex-factory quotation is about 5000-5500 yuan/ton.

Crude oil: On September 18, WTI crude oil futures fell $1.23, or 2.07%, to $58.11 a barrel; Brent crude oil futures fell $0.95, or 1.47%, to $63.60 a barrel. China’s main SC crude oil futures contract was about 1911 yuan 473.6 yuan per barrel, down 10.5 yuan.

Industry chain: Recently, the crude oil market has risen sharply before falling, and the focus of gravity has begun to fall. The liquid wax market is short of resources, stable operation, stable shipment of manufacturers, small adjustments in the market price range. The liquid chlorine market operates at a high level, and some areas maintain high prices and the market rises. The downstream demand for chlorinated paraffins has slightly improved, and stocks have increased in some areas.

3. Future Market Forecast

Analysts of chlorinated paraffin business associations believe that due to the recent increase in raw material costs, the shortage of chlorinated paraffin supply, the National Day environmental protection and production restrictions, manufacturers began to actively stock up, chlorinated paraffin prices rose in stages. It is expected that chlorinated paraffin prices will fluctuate in the later period.