Price Trend

In August, the domestic dimethyl ether market continued to decline. At the beginning of the month, the average domestic dimethyl ether market price was 3210 yuan/ton, and at the end of the month, the average price was 2920 yuan/ton. The decline rate in the month was 9.03%, and the price fell 30.29% compared with the same period last year.

II. Market Analysis

Products: Dimethyl ether market continued to decline in August, the market trading atmosphere is flat. As of August 30, Hebei Yutai dimethyl ether plant is not quoted for parking, Henan Lankao Huitong Chemical Co., Ltd. is not quoted for dimethyl ether, Henan Yima Xinyuan dimethyl ether plant failure is not quoted for the time being. The ex-factory price of dimethyl ether of Henan Xinlian Chemical Industry Group Co., Ltd. is 2910 yuan/ton, that of Henan Shengxin Biotechnology Co., Ltd. is 2850 yuan/ton, that of Hebei Jichun Chemical Co., Ltd. is 3000 yuan/ton, that of Shandong Dezhou Shengdeyuan Co., Ltd. is 2980 yuan/ton, and that of Shanxi Orchidaceae Co., Ltd. The ex-factory price of dimethyl ether in Technological Venture Co., Ltd. is 2900 yuan/ton.

The domestic dimethyl ether market continued to decline in August. At the beginning of August, the profit of dimethyl ether Market was relatively high. Some manufacturers started driving and the market supply increased, but the terminal demand was slow, the contradiction between supply and demand was prominent, and the price fell mainly. In mid-August, in order to avoid the continuous downward price, Henan Xinlian implemented the policy of keeping the bottom price for many times. Although it protected the market price on the side, it still did not alleviate the shipment situation of manufacturers. Inventory accumulated, pressure increased gradually, more profit was given priority to the shipment, and the price was lowered again. Until the end of August, the dimethyl ether Market has not improved substantially, the inventory of dimethyl ether manufacturers is difficult to release. Most enterprises’prices have fallen below 3000 yuan. The downstream market has a strong hollow outlook on the future market. Most of them are on demand, wait-and-see. The manufacturers’ shipments continue to be cold and the market continues to be weak.

Industry chain:

In August, the methanol market rose first and then depressed. In the early August of Henan, the overhaul of enterprises increased, the market supply decreased, and the prices continued to rise. However, in late August, there is no substantial improvement in downstream demand, the overall shipment is not satisfactory, the pressure on merchants to ship is increasing, and the price fluctuation is falling. In the latter half of the year, most devices were restarted one after another. In addition, the trend of futures market was weak, which affected the market mentality. The downstream mentality was cautious, multi-wait-and-see was dominant, and the price continued to weaken. At present, downstream demand is in a weak position, and port inventory remains high.

The narrow adjustment of liquefied petroleum gas (Shandong market) shocks in August is the main factor, and the international crude oil price still has a great impact on the liquefied petroleum gas market this month. In early August, liquefied petroleum gas prices continued to be low, downstream risky mentality into the market was positive, manufacturers shipped more smoothly, inventory pressure, and then pushed up. However, limited by the decline in international crude oil, the increase is not significant. In mid-August, the typhoon affected the production and transportation of the manufacturers, blocked shipment for several days in a row, and prices fell. Subsequently, the weather gradually weakened, shipments returned to normal, inventory was eased, and international crude oil pushed the market higher. But shipments have improved for a short time, although the traditional sales season is approaching, but demand is limited, coupled with the expected fall in September CP, downstream bearish on the future market, the enthusiasm for entering the market has faded. The shipment of the manufacturer returned to flat again, and the price fell again at the end of August. Until September CP was introduced, propane had fallen but less than expected, alleviating the market mentality and rising prices slightly.

Industry: According to the price monitoring of business associations, in August 2019, there were five kinds of commodities rising in the energy sector, of which more than 5% increased, accounting for 6.3% of the monitored commodities in the sector. The top three commodities were MTBE (8.16%), gasoline (2.24%) and methanol (1.22%). There are 11 kinds of commodities with a decline of more than 5%, accounting for 25% of the monitored commodities in this sector. The products with the first three declines are dimethyl ether (-9.03%), liquefied natural gas (-7.08%) and Brent crude oil (-6.28%). This month’s average rise and fall was -1.52%.

3. Future Market Forecast

Dimethyl ether business analysts believe that: at present, the trend of cost methanol and liquefied gas is weak, negative market mentality, but as the weather gets cooler in September, the demand for liquefied gas is gradually rising, which may boost the market. The dimethyl ether Market is expected to stabilize in September.

Price Trend

In August, the propane market was mainly narrowly adjusted. At the beginning of the month, the average market price of propane was 3615 yuan/ton, and at the end of the month, it was 3692.5 yuan/ton. The average price of propane rose by 2.14% in the month, which was 31.06% lower than that of the same period last year.

II. Analysis of Influencing Factors

Products: Propane price shocks this month, the market atmosphere is general. As of August 30, propane from Dongming Petrochemical Company of Shandong Province has been stopped for self-use and no quotation has been offered for the time being. The ex-factory price of propane in Tianjin Bohai Chemical Industry Group is 3600 yuan/ton, Shandong Haiyou Petrochemical Group is 3700 yuan/ton, Shandong Huifeng Petrochemical Company is 3750 yuan/ton, Shandong Hengyuan Petrochemical Company is 3720 yuan/ton, and Shandong Binzhou Dayou Group is 3700 yuan./ The ex-factory price of propane in Shandong Zhonghai Fine Chemical Co., Ltd. is 3700 yuan/ton. The ex-factory price of propane in Shandong Yuhuang Shengshi is 3630 yuan/ton. The ex-factory price of propane in Qingdao Refinery and Chemical Co., Ltd. of Sinopec is 3400 yuan.

Industry chain: The narrow adjustment of liquefied petroleum gas (Shandong market) shocks in August is dominant, and the international crude oil price still has a greater impact on the liquefied petroleum gas market this month. In early August, liquefied petroleum gas prices continued to be low, downstream risky mentality into the market was positive, manufacturers shipped more smoothly, inventory pressure, and then pushed up. However, limited by the decline in international crude oil, the increase is not significant. In mid-August, the typhoon affected the production and transportation of the manufacturers, blocked shipment for several days in a row, and prices fell. Subsequently, the weather gradually weakened, shipments returned to normal, inventory was eased, and international crude oil pushed the market higher. But shipments have improved for a short time, although the traditional sales season is approaching, but demand is limited, coupled with the expected fall in September CP, downstream bearish on the future market, the enthusiasm for entering the market has faded. The shipment of the manufacturer returned to flat again, and the price fell again at the end of August. Until September CP was introduced, propane had declined but less than expected, alleviating market mentality and rising prices slightly.

In August, the price of propylene market declined sharply, fluctuations were still frequent, with a total of three peaks and troughs. Polypropylene powder, butyl octanol and propylene oxide are still profitable, customer procurement is positive; in August, the domestic acrylic acid market rose by 3.04%, which is good for the propylene market; epichlorohydrin began to oscillate downward, with a monthly decline of 23.28%, a monthly amplitude of 28.63%, and the recent market is mainly consolidation, or for the propylene market. Propylene prices have a negative impact.

The propane Market as a whole rose slightly in August, mostly due to shocks. At the beginning of this month, CP price was introduced in August, propane slightly fell, which brought bad news to the market. In addition, the international crude oil fell sharply on August 2, which affected the market mentality. The enthusiasm for entering the market downstream was not high, the manufacturers’shipments were not smooth, and the main focus of propane price was to let profits drain away from the warehouse. But in mid-August, with the sustained upward trend of international crude oil, propane market was boosted, downstream market entry enthusiasm improved, manufacturers shipped smoothly, inventory pressure was not high, and prices stopped falling and rebounded. But August is still the traditional off-season of demand, the contradiction between supply and demand is prominent, coupled with the anticipated fall of CPs in September, the price rise is blocked. Until the end of August, when the CP price was introduced in September, propane dropped slightly compared with last month, but the decline was less than expected. The market mentality was supported and the price rose slightly.

Saudi Amy Corp. announced in September that the price of propane was lowered and the price of butane was flat. Propane was $350 per ton, down by $20 per ton from last month; butane was $360 per ton, flat from last month. The cost of long-term approximate cargo propane converted to onshore is around 3 022 yuan/ton and that of butane 3100 yuan/ton.

Industry: According to the price monitoring of business associations, in August 2019, there were 37 commodities rising annually in the chemical sector, of which 15 commodities increased by more than 5%, accounting for 17.9% of the monitored commodities in the sector; the first three commodities were hydrogen peroxide (39.93%), acetic acid (20.90%) and butadiene (14.47%). There are 39 kinds of products with a decline of more than 5%, accounting for 15.5% of the monitored products in this sector. The products with the first three declines are yellow phosphorus (-27.58%), epichlorohydrin (-23.28%) and sulfur (-19.38%). This month’s average rise and fall was 0.03%.

3. Future Market Forecast

Propane analysts at business associations believe that although the atmosphere is not good in August, demand will increase in September compared with August as the weather gets colder. With the expectation of “gold, nine silver and ten silver” in the traditional sales season, September is expected to reverse the situation and prices will gradually rise.

Price Trend

This week, the domestic phenol Market is very competitive. According to the monitoring data of business associations, up to now, phenol petrochemical plants in eastern China have offered 7600 yuan/ton and local market 7600 yuan/ton.

II. Analytical Review

Products: This week’s domestic phenol Market is strong or narrow, petrochemical manufacturers issued an increase of 100 yuan/ton at the beginning of the week, the mentality of traders in all regions was boosted, and the East China region was boosted, but near the end of the month, the contract was basically completed, with no pressure on delivery, and the offer was reduced. Downstream more just need to follow up, trial order transactions reduced. Less than 80% of phenol and ketone enterprises started construction, Xisa Chemical Company stopped for 4 days on the 29th. The port stock is 39500 tons.

Up to now, the market offers are as follows: the mainstream reference offer in East China is 7600 yuan/ton, the Yanshan region is 7700 yuan/ton, the Shandong region is 7650 yuan/ton, the Henan region is 7900 yuan/ton, and the South China region is 7900 yuan/ton.

Industry Chain: This week, Sinopec’s pure benzene listing was raised by 100 yuan, the price was 5300 yuan / ton, and the price of propylene in East China was lowered by 100 to 7450 yuan / ton. Downstream domestic BPA started stable at 80%, phenolic resin factory fluctuation is small, on-demand procurement.

3. Future Market Forecast

Domestic phenol Market Consolidation and operation, Lihua Yi Phase II bisphenol A plant is planned to put into operation, phenol will continue to be shipped in limited quantities, Shandong supply shortage, East China port cost pressures, low-price shipment intention is not big, or strong price intention, business associations expect the domestic phenol Market Consolidation and operation next week, East China offer 7600 yuan/ton.

Market data show that since November last year, Asian LNG spot prices have fallen from more than $10 / mmBTU to the current $4.5 / mmBTU, only half of the same period last year.

For China, where the scale of natural gas consumption continues to grow rapidly, it should be a good time for LNG prices to continue to decline. However, reporters have noticed that the growth rate of LNG imports in China has shown an “abnormal” slowdown since this year.

Statistics show that China’s LNG imports increased by 19.5% in the first half of the year, compared with 49% in the same period last year. The industry expects LNG import growth to fall further below 10% in the third quarter. What are the reasons?

Loose Supply and Demand Causes Global Gas Price to Decline

“This year’s international LNG spot price is relatively low, mainly because the supply is very sufficient.” Xiong Xin, deputy general manager of Trade Department of Zhonghai Petroleum Gas and Electricity Group, told reporters.

With the rapid increase of natural gas in energy supply, LNG is growing at a rate of more than 10% per year, becoming one of the fastest growing energy products in the world, which has led to the rapid growth of global LNG production capacity.

Statistics show that the new supply of LNG producers worldwide will exceed 30 million tons this year. If the planned capacity projects can be put into operation before the end of the year, the number is expected to reach 40 million tons.

But on the demand side, since this year, due to the weakening momentum of world economic growth and the continuing warming of trade protectionism, as the main incremental market of global LNG trade, the growth of LNG demand has slowed down synchronously in Asia. As the top three LNG importers in the world, Japan, China and South Korea have all experienced different degrees of demand decline.

Global loosening of supply and demand has led to a sustained decline in LNG spot prices. It is reported that, as the largest market to absorb new LNG production in the world this year, the spot price of LNG in Europe has recently dropped to a new low in more than 10 years. LNG spot prices in Asian markets are also at their lowest levels in recent years.

“Considering the concentration of new production capacity in the upstream in the past one or two years, we believe that the supply of international natural gas resources will remain relatively loose until 2020. With a new wave of new production capacity coming into operation after 2023, the situation of oversupply is likely to re-emerge.” Xiong Xin thinks.

Domestic Import Growth Rate Doesn’t Rise but Decline

Loose supply and demand and falling prices are undoubtedly very good for China. “Now is a good time to buy a lot of international LNG resources. Whether it is a long-term contract or spot, including upstream equity participation, the buyer will benefit. Xu Jiangfeng, senior engineer of comprehensive planning at CNOOC Economic and Technological Research Institute, said.

“At present, LNG spot price has certain advantages even compared with pipeline gas. Therefore, for some domestic receiving stations, they are free to purchase spot goods.” Zhuo Chuang Information Natural Gas Analyst Guojian told reporters.

Take Sinopec as an example. Since this year, the group has increased LNG imports. In the first half of the year, LNG imports increased by 73% year-on-year. Among them, the monthly receiving capacity of Tianjin LNG receiving station maintained a high level and reached a record of 10 LNG vessels in the off-season of traditional consumption in May.

“There are two main reasons for the large increase in imports: first, to meet and consolidate the market needs to increase the total volume and ensure supply; second, the increase is mainly in spot, through more imports of spot can spread the cost of long-term cooperation, reduce losses, and increase the revenue of the receiving station.” Liu Jianwen, deputy general manager of Sinopec Great Wall Gas Company, told reporters. He further pointed out that Sinopec’s imported LNG spot resources contributed about 35% of the Group’s LNG import increment in the first half of the year.

However, according to the overall import data in the first half of last year, the import volume of LNG in China was 28.43 million tons, an increase of 4.69 million tons over the same period last year, an increase of 19.5% over the same period last year, while in the first half of last year, the import volume of LNG in China increased by 7.83 million tons, an increase of 49% over the same period last year. By comparison, the growth rate of LNG imports declined significantly.

“Compared with the same period last year, the main reason for the relatively low growth of domestic LNG imports this year is the decline in demand.” Xiong Xin explained. “We expect the domestic gas consumption growth rate to be around 12% this year. At present, there is no new increment of imported pipeline gas, and it can only be produced by imported LNG and self-produced gas. National Construction further pointed out.

It is worth noting that for major domestic LNG importers such as CNOOC and PetroChina, the first priority is to absorb the high-priced and non-negotiable resources of the CPPCC LNG.

According to the usual practice, domestic enterprises usually arrange long-term import plans for the second year before the fourth quarter, that is, September and October. “In fact, last year’s”three barrels of oil”in the arrangement of this year’s long contract volume, the situation this year is relatively optimistic, coupled with some previous undermentioned volume, long LNG volume overall arrangement is more, so this year there is little room to import more low-cost spot gas.” Industry insiders familiar with the situation told reporters.

Take multiple measures to “digest” import losses

With the diversification of global LNG suppliers, LNG spot “limelight” is becoming more and more prosperous. According to DNV GL’s latest LNG market outlook report, by the middle of the next decade, most of the increase in natural gas supply will flow to the market in the form of LNG.

It is reported that in order to enhance the competitiveness of the natural gas industry, most LNG buyers began to tend to sign short-term, small quantities of high flexibility contracts. According to the latest report of the International Organization of LNG Importers (GIIGNL), China, Korea and Japan absorbed 52% of the world’s natural gas spot in 2018, totaling 41 million tons.

At present, in the portfolio of imported LNG resources in China, long-term contracts account for more than 70%, while short-term and spot imports are less than 30%.

In the context of the imminent establishment of the National Pipeline Network Company, how can the “three barrels of oil” which bear huge inverted losses due to carrying the resources of the CPPCC with low price and sufficient spot supply?

“It is impossible to smooth down long-term losses by relying on low-cost spot resources.” Xu Bo, a natural gas expert at the China Petroleum Economic and Technological Research Institute, bluntly said that the reason was that the stock was too small. “At present, long-term import is still the main force of guarantee supply, but if too much spot resources are imported, it will not only promote the rise of international gas prices, but also reduce the security factor of domestic supply.

In Xiong Xin’s view, the reliability of resources also depends on supply and demand, referring to the situation of crude oil market. “In fact, the safety of China’s crude oil supply has not been affected by the long contract or the short contract. If the maturity of the market is high enough and the liquidity is strong enough, long contract and spot should not be the key factors affecting the guarantee.

Xiong Xin pointed out that in any case, low prices will be a better opportunity for future new contracts and private enterprises. With the continuous expansion of domestic natural gas consumption scale, the balance role of low-cost resources will be revealed. At the same time, with the continuous expansion of international LNG spot trade scale, the future boundaries between long contract and spot will gradually become blurred. Traditional buyers can also optimize the structure of import resources through “resale” to alleviate their long contract losses to a certain extent.

“To solve the upstream import losses, we must take comprehensive consideration and take various measures simultaneously.” Liu Manping, an expert of the China Oil and Gas Think Tank Alliance, further pointed out that, for example, in the reform opinion, it was mentioned that the equity gains of the “three barrels of oil” in the pipeline network company could be compensated, while the terminal price of natural gas still needs to be adjusted appropriately.

Price trends:

According to the data of the business associations’list, the domestic ABS market was in a narrow fluctuation in August, and the price was stable temporarily. As of August 29, the mainstream offer price of general-purpose ABS was about 1290.00 yuan/ton, up 0.78% from the beginning of the month.

2. Analysis of influencing factors:

Industry chain: ABS upstream, in early August by international oil prices, pure benzene continued to fall, styrene market prices continued to fall, a larger decline. In addition, the external news continued to be negative, domestic enterprises stepped up inventory, most enterprises reduced prices and promotions, merchants have a higher intention to deliver goods, let profits go single. In the middle of the year, the news of the easing of Sino-US trade affected the on-site environment temporarily. The price of most domestic enterprises has been revised back, and the demand of the downstream main body remains at a low level, so the purchasing strategy of just-in-demand has been adopted. At the end of the month, the international crude oil market continued to improve, the overall oil price shocks up, the US dollar rose, giving styrene cost support. After the whole Styrene Market rebounded, it maintained a high level, while the profit margin of the production enterprises decreased slightly, because the prices of pure styrene and ethylene began to rise. At present, the domestic production plant is relatively stable, the production and marketing of enterprises are stable, and the spot supply is still tight. It is expected that the price of styrene will rise slightly with the cost rising in the near future.

This month, the domestic butadiene market rose, the external market was high, the domestic manufacturers had no obvious inventory pressure, and the state-owned synthetic rubber plant operated steadily. In the downstream of East China’s new output supply contract, there is no spot inflow into the trade link for the time being, and Sinopec’s internal supply is relatively tight, butadiene market performance is relatively strong.

In August, the spot supply of acrylonitrile-related products was slightly tighter, downstream demand maintained just demand, and supply and demand in the field basically balanced. Downstream rubber market is weak, some private enterprises parking. However, the acrylonitrile inventory has been reduced to a low level, and the mindset of the operators is stable. In recent years, domestic acrylonitrile quotation is relatively stable, the market is flat and tidy; ABS upstream support is still acceptable, downstream household appliances industry demand is weak, the market as a whole is short of gas. Domestic ABS shock adjustment in August.

3. Future market forecast:

Business analysts believe that: August domestic ABS offer narrow shock adjustment. Upstream three materials on the cost side support the cost side is still acceptable, and the mid-term Sino-US talks to ease the release of news are positive. However, in the context of imbalance between supply and demand, downstream purchasing is negative, and the mindset of the traders is more wait-and-see. Bad market trading drags down ABS market, and bearish bulls pull each other. It is expected that the recent ABS offer trend will continue to shake the whole market.

Since this year, the shadow of economic and trade frictions and the slowdown of global economic growth have always dominated the sentiment of the crude oil market. The fluctuation of international oil prices makes it difficult to make a major breakthrough. Institutions predict that U.S. crude oil exports are expected to grow further, and the global crude oil market may continue to oversupply.

Increased U.S. oil export capacity

CNBC reports that Citigroup’s commodities research team predicts that the new pipeline will help break through the bottleneck of shale oil transportation in the United States, further increase U.S. crude oil exports and further highlight the contradiction of oversupply in the global crude oil market. With the help of the new pipeline, by the end of this year, U.S. oil exports will increase from the current 3 million barrels per day to 4 million barrels per day, and another 1 million barrels per day next year. Last year, U.S. exports grew by 970,000 barrels per day over the previous year.

According to reports, starting this month, Plains All American Pipeline LP, a U.S. oil and gas pipeline transportation, marketing and storage company, launched a new pipeline, Cactus II, to deliver 670,000 barrels of crude oil produced in the Permian basin, the core area of U.S. shale oil, to the Gulf of Mexico. This means that the Permian basin pipeline transportation problem, which has long plagued American shale oil producers, has begun to be solved.

Citigroup believes that commercial use of the new pipeline will help break through the bottleneck of oil transportation in the Permian basin. “Within six to eight months, the United States will produce 4 million barrels a day, much more than the entire North Sea,” said Morse, head of global commodity research at Citigroup. Crude oil will be shipped everywhere, and if U.S. production reaches 6 million barrels a day in three years, it will become a global benchmark. Local production is expected to double to about 8 million barrels per day by 2023.

Over the past decade, U.S. oil production has more than doubled. The United States has become the largest oil producer, and its oil production has now approached a historic high. According to the U.S. Energy Intelligence Agency (EIA), U.S. crude oil production remained at 12.3 million barrels per day as of the week of 15 this month, only 100,000 barrels per day less than the highest level in history.

Prior to this, the lack of infrastructure needed to transport crude oil from Dezhou Oilfield to export ports and enter the world market has restricted U.S. crude oil exports and global crude oil supply. Now the problem has been solved. With the construction of crude oil pipelines, the U.S. crude oil export capacity will also be enhanced. The entire Gulf Coast, Texas and Louisiana are expanding their unloading facilities, and shipping facilities are expanding along the Gulf Coast. Citigroup expects the U.S. export capacity to expand to 6 million barrels a day, or even higher.

OPEC’s output cuts were offset

In the international crude oil market, on the one hand, the Organization of Petroleum Exporting Countries (OPEC) continued to reduce production, which promoted oil prices to strengthen. On the other hand, the rising production of shale oil in the United States, the anticipated decline in global demand and the strong US dollar hindered oil prices to rise. The two forces have gone from strength to strength, which has become the main force behind the large fluctuations in international oil prices since this year.

Owing to trade frictions, increasing downside risks in the global economy and difficulties in boosting crude oil demand, OPEC still insists on production reduction measures, and the output and output reduction of oil producing countries in July exceed the expectations of the reduction agreement. According to the OPEC Technical Committee, the reduction rate in July was 159%, OPEC’s compliance rate in July was 156%, and non-OPEC members’reduction rate was 166%.

Once the supply of U.S. crude oil to the international crude oil market increases, it will greatly offset OPEC’s output cuts. At the same time, the new oil supply from the United States has also put OPEC in a dilemma. Francisco Blanch, head of commodities and derivatives research at Bank of America, said OPEC’s market share had fallen by 1% annually over the past seven years.

For Saudi Arabia eager to achieve budget balance, the process of achieving global oil market balance is too slow. Analysts believe that Saudi Arabia will increase output cuts and reduce exports in the future, while the continued decline in production in Iran and Venezuela will accelerate the process. As for non-OPEC countries such as Russia, the possibility of continuing to cooperate with OPEC is due to the anticipated economic slowdown, resulting in pressure to reduce production. But with Russia’s recently announced break-even oil price target of less than $50, and the recent slight rebound in Russian exports, the market speculates that Russia may be divided on the way to cooperate with Saudi Arabia to reduce production.

Market Equilibrium is Temporarily Difficult to Realize

U.S. light crude oil futures prices have fallen back from a one-year high of $75 a barrel in October 2018. Oil prices have been volatile, falling to a low of $42 on Christmas Eve last year, and have since recovered, now in the middle of $50. Brent crude oil futures hovered around $60 a barrel this month.

Some analysts pointed out that the crude oil price trend still needs to pay attention to the implementation of OPEC’s production reduction plan, changes in supply and demand in the crude oil market and the trend of the US dollar.

Joint Organisation Data Initiative (JODI) data show that since the third quarter of 2014, the decline in oil consumption has reached the highest level. The last time demand fell at this level was between 2014 and 2015, when oil prices plunged because of falling consumption, increased production of shale oil in the United States and Saudi Arabia’s refusal to cut production.

When the international crude oil market balances has always been a problem that puzzles the market. At present, it seems that this goal has not been achieved. Once oversupply reappears, the balance of the crude oil market will be delayed and oil prices will be difficult to boost.

Energy analyst John Kemp predicts that if U.S. crude oil production slows down and OPEC continues to cut production, the balance will not be achieved until mid-2020. He believes that only by suppressing shale oil production growth through sustained low oil prices can consumption be effectively promoted in order to achieve market balance.

Citigroup is also not optimistic about the future of crude oil. Citigroup believes that demand will fall even without a recession, given the increased likelihood of global GDP falling. There will be too many problems in the next two to three years, and oil prices will be challenged in the next two to three years.

According to Prussian Energy Information Report, the latest data released by the General Administration of Customs on Monday showed that China’s gasoline exports rebounded 56.1% in July from a year earlier to about 1.56 million metric tons, better than the 18% increase in June.

Some analysts believe that after the full commissioning of Hengli Petrochemical (Dalian) Refinery with an annual output of 20 million metric tons, China’s domestic market demand is weak, prompting state-owned refineries to export more gasoline.

Customs data show that China exported 998,000 metric tons of gasoline in June, which was lower than expected. It is also believed to have led to a sharp increase in exports in July.

However, Klper, a data intelligence provider, said China shipped and exported 1425,000 tons of gasoline in June, based on vessel tracking information.

Compared with the same period last year, exports increased by 74.5% year-on-year.

In July, China’s exports to Africa, Nigeria, Mexico and Ecuador, the Middle East, the United Arab Emirates and Oman totaled 504,000 metric tons, accounting for 32.3% of the total exports in that month.

By contrast, exports to these countries totaled 198,000 metric tons in June, accounting for 22.2% of total exports.

Among these countries, exports to Nigeria were 167,000 metric tons, an increase of 177.8% over the previous month, while exports to Mexico increased 315.8% to 138,000 metric tons in July.

Apart from these five destinations, the rest are traditional Asian receivers.

The first 200,000 barrels of crude oil exported from Kenya were shipped from Mombasa on the same day, marking Kenya becoming the first oil exporter in East Africa, according to President Uhuru Kenyatta of Kenya in the port city of Mombasa, Xinhua News Agency reported.

Kenyatta said the first 200,000 barrels of low-sulfur crude oil exported were worth 1.2 billion shillings ($12 million) and were priced higher than market expectations.

Kenya’s Deputy Minister of oil and minerals, Andrew Kamau, had previously said that Kenya planned to export 400,000 barrels of crude oil this year. The first batch of 200,000 barrels of crude oil was exported in the third quarter of this year, and the second batch was carried out at the end of the year.

Kenya is currently implementing an Early Oil Exploitation Plan. Kamau said Kenya is scheduled to produce 2,000 barrels of crude oil a day. Kenya will transport crude oil through other transportation facilities before the completion of the oil pipeline from Rockichar to Lamu Harbour in Kenya.

Kenya’s oil exploration began in 2012. According to data disclosed by exploration companies, Kenya’s proven oil reserves are currently estimated at about 750 million barrels.

Price Trend

The average price of phosphoric acid was 5833.33 yuan/ton on August 13, 5066.67 yuan/ton on August 27 and 13.14% in 15 days, up 14.22% compared with the same period last year.

II. Market Analysis

Products: In the first half of August, the price of phosphoric acid market was high and stable. In the second half of the month, major enterprises began to reduce their quotations. As of August 27, the average price of 85% industrial purified water phosphoric acid market was about 5066.67 yuan/ton. Hubei Xingfa Group quoted 6000 yuan/ton. Sichuan Shifang Kanglong quoted 4600 yuan/ton. Oufuda Prefecture quoted 4800 yuan/ton and North China quoted 4600 yuan/ton. Beijing Airlines Xinghongda quoted 5400 yuan/ton, Guangxi Mingli Group quoted 5200 yuan/ton, Qianrui Chemical Industry quoted 4500 yuan/ton, prices fell sharply everywhere, and the market returned to rationality.

This year’s market is different from previous years. In general, during the flood season, yellow phosphorus enterprises start construction at a high level, supply is sufficient and prices are at a low level. This year, due to environmental protection and other factors, some enterprises stop production and the market of conductive phosphoric acid is rising. With the upstream Yellow Phosphorus market price pressure drops, the market center of gravity moves downward. In addition, Yunnan yellow phosphorus plant starts construction one after another, the market supply increases, and the price of yellow phosphorus keeps falling, thus driving the hot process phosphoric acid market. The terminal is mainly just needed, because the high-end price of thermal phosphoric acid can not be recognized downstream, the market is flat, phosphoric acid prices continue to decline. At present, the industry is off-season, phosphoric acid in the case of weak supply and demand, pressure to reduce prices, downstream users actively replenish, open pre-holiday stock mode. Recently, some yellow phosphorus enterprises will stop production and rectify, the market supply is tight, the price rises slightly, but phosphoric acid enterprises are still waiting and watching, rational price control, although there is a small increase, but the overall market consolidation is in the majority.

Graph.100ppi.com

Industry chain: The market continues to operate steadily, and intra-venue trading is still relatively light. The overall focus of the yellow phosphorus market is upward, and the current market trading atmosphere is good. Due to environmental factors, the starting rate of yellow phosphorus is not high, and the price upward trend is strong. Up to the 22nd, Yunnan yellow phosphorus mainstream quotation is 15 500-16 000 yuan/ton. The mainstream quotation in Sichuan is about 15 500 yuan per ton. The main transaction price of yellow phosphorus in Guizhou is about 15 300 yuan/ton. The downstream phosphate enterprises do not purchase much, and the end users are generally enthusiastic about purchasing. The market demand of autumn fertilizer is not good, the enthusiasm of downstream compound fertilizer enterprises is not high, the price of ammonium market is stable or downward in the short term, and the disadvantage of diammonium market is sorted out, turning to the weak domestic market.

Industry: According to the price monitoring of business associations, in the 33rd week of 2019 (8.19-8.23), the price of phosphorus chemical industry rose or fell by 0 commodities, 2 commodities fell, and 3 commodities rose or fell by 0. The main commodities falling were phosphoric acid (-3.23%) and diammonium phosphate (-0.93%). In the 33rd week of 2019 (8.19-8.23), there were 1 commodity rising in the list of fertilizer prices, 3 commodities falling, and 5 commodities rising or falling to 0. The main commodities rising were liquid ammonia (0.31%) and falling were ammonium sulfate (-1.54%), diammonium phosphate (-0.93%) and potassium sulfate (-0.81%).

3. Future Market Forecast

Phosphoric acid analyst of business cooperative chemical branch thinks: with the market demand of yellow phosphorus getting better and the overall focus going up, phosphoric acid enterprises may increase along with the increase of cost, but the increase is limited. People in the industry are watching the market and most are bullish. It is expected that phosphoric acid future market will still be dominated by consolidation.

I. Overall Trend

In recent March, the trend of three major PE varieties in the domestic market has shown a volatile downward trend. According to the monitoring of business associations, as of August 26, the ex-factory price of LLDPE 7042 in East China had dropped to about 7400 yuan/ton; the ex-factory price of LDPE 2426H had dropped to about 8300 yuan/ton; the ex-factory price of HDPE 5000S had dropped to about 8416.67 yuan/ton; the decline ranged from 100 to 600 yuan/ton.

II. Market Analysis

PE spot market has experienced three setbacks in recent March, falling as a whole. At the beginning of June, due to the off-season demand downstream and the continuous downward trend of linear futures, the market delivery was not smooth and petrochemical stocks accumulated. Most petrochemical enterprises in the region lowered the ex-factory price of PE, which affected the market atmosphere. Traders were pessimistic. The spot market continued to be flat as a whole, and prices were continuously lowered. In mid-June, with the ease of the international economic environment and the arrival of the equipment maintenance season, the market supply has decreased, playing a certain supporting role, and prices have stabilized.

At the end of June, futures rebounded after the fall and continued to rise, coupled with a sharp rise in crude oil, which boosted the spot market. Petrochemical raised the ex-factory price, PE market rose after falling. Traders report high trend, downstream and middlemen purchase part, the speed of consumption of goods is accelerating, replenishing warehouses into the market, the market trading atmosphere improved, and prices rose slightly.

But the prospects are not long, PE spot market fell again in mid-July. Futures trading continued to tumble downward, falling below the 8000 threshold. The market pressure mentality is obvious, downstream enterprises’wait-and-see atmosphere is aggravated, and their enthusiasm for entering the market is declining. Futures continued to decline, market trading was weak, distributors’delivery pressure increased, and the bullish outlook on the future market increased. Petrochemical enterprises have gradually accumulated inventories and factory prices have been lowered. Market cost has lost support and prices have continued to fall. At present, Petrochemical stocks have declined slightly, but the speed is slow, traders are pessimistic, accompanied by underreporting, mainly shipments. The downstream enterprises are weak in receiving goods, purchasing more on demand, running in low inventory, and the overall delivery atmosphere of the spot market continues to be light.

For downstream enterprises, the demand for film materials continued to be weak in June, with limited accumulation of manufacturer orders, a small amount of low start-up, increased demand for sunlight film compared with the earlier period, and the demand for plastic film ended, and the manufacturer gradually turned to shutdown. In July, the demand for functional membranes has been followed up. The production of large and medium-sized enterprises is general, and that of small enterprises is poor. The overall start-up rate is 3-40%, the demand is in the off-season, and the manufacturers are mostly in the state of shutdown. In August, the production of functional film enterprises changed little, orders increased slightly, sunlight film was in the peak season of demand, the production of manufacturers was relatively stable, the start-up rate was 5-80%. The demand for plastic film continues to be weak, and is still mostly in a state of shutdown. Although the peak season of greenhouse film started slowly, the intensity was not as expected, and the number of terminal orders did not increase significantly.

Import and export: In June 2019, PE exports totaled about 186,000 tons. Among them, LLDPE export volume was 0.75 million tons, which was 3.85% lower than that of last month; HDPE export volume was 0.91 million tons, which was 37.67% lower than that of last month; LDPE export volume was 0.22 million tons, which was 31.0% lower than that of last month.

3. Future Market Forecast

Business societies data analysts believe that although the current demand for agricultural film, pipe and other industries has recovered, but not as expected, the demand side slowly improved, continue to short the market. International oil prices and linear futures both fell, to a certain extent, depressed the enthusiasm of the industry to enter the market. In addition, Petrochemical continued to reduce the ex-factory price, the market cost support weakened. Some manufacturers are still in maintenance status, to a certain extent, favorable to the surrounding market, but the peak season of agricultural film started slowly, there is some room for recovery. It is expected that market consolidation or weak consolidation will dominate in the short term.