Reporters learned from the industry that the recent vitamin factory Tiger due to shortage of raw materials calcium pantothenate products shutdown, the market circulation of goods reduced, leading to the main manufacturers shortage of shipments, have bid. Last weekend, there was another rumor in the market that a manufacturer in Zhejiang stopped reporting and the quotation of distributors continued to rise. The price of calcium pantothenate rose from 155-160 yuan/kg the previous week to 180-200 yuan/kg last weekend. Some enterprises even signed 210/kg lists on the market.

Market survey shows that more than 60% of practitioners believe that the price of calcium pantothenate has an upward trend. The industry believes that with the coming of the market peak season, the upstream raw material tension and demand is expected to continue to pull the price of calcium pantothenate firm.

European polyethylene (PE) prices have risen for the first time since June 2018.

Some traders breathed a sigh of relief.

“The past few months have been really tough and prices have been falling,” one of them said.

Another trader said, “It’s great to hear that after several months of decline.”

The last time most PE prices rose was in June 2018.

For several months, some PE spot prices have been lower than contract prices for ethylene.

Since July 2018, the spot low-end price of low-density polyethylene (LDPE) has been significantly lower than the contract price of ethylene, and the net low-end price of C4 (butenyl) linear low-density polyethylene (LLDPE) has performed worse.

The last time the spot low price of C4 LLDPE was higher than the contract price of ethylene in March 2018, the upward pressure was the greatest in March, because there were fewer imported materials available.

Most of the low density polyethylene C4 used in Europe is imported, so the relationship with ethylene may not be the same as other brands, but the price of global exports to Europe has been very low.

Last week, spot prices of C4 LLDPE fluctuated sharply, some quotations were still below the level of ethylene contracts, and some buyers were forced to raise prices substantially to get the volume they needed.

The net price of LDPE has also risen, with FD quoting more than 1,000 euros per ton in Northwest Europe.

Low density polyethylene (LDPE) and C4 low density polyethylene (C4 LLDPE) are in short supply due to production problems and reduced imports. Although some buyers have to accept higher prices, they are well supplied.

High density polyethylene (HDPE) has mixed tastes. The price gap between ethylene and HDPE has always been higher than LDPE and LLDPE, but sellers are also pushing up prices.

Rising prices and weak demand

Despite the sharp rise in prices, demand from smaller sellers did not all improve in March.

One of them said: “Prices are rising, but sales are not. There is no shortage of anything and not many customers want to buy it.

Big customers may sell better, and some buyers are making sure their needs are met once the plant maintenance plan is in place.

Sources said May was an important month for ethylene supply, but they also expected that as long as everything went according to plan, there would be no shortage.

Some sellers had predicted price increases of up to 50-70 euros per ton, but buyers were very skeptical that the price would not be higher than the increase in the contract price of ethylene.

PE negotiations usually take a long time to reach an agreement, and retrospective pricing still exists in many regions.

PE is used in packaging, household goods manufacturing, and also in the field of agriculture.

According to data released by the General Administration of Customs on March 8, China imported 39.233 million tons of crude oil in February, an increase of 69.71 million tons, an increase of 21.6%, and a decrease of 33.64 million tons, a decrease of 7.9%.

Crude oil imports in February amounted to $17234.8 million, up 9.1% year-on-year and down 7.7% year-on-year. Based on this, it is estimated that the unit price of imports is US$439.3 per ton, an increase of US$0.8 per ton, and a decrease of US$50.2 per ton compared with the same period last year.

In February, China imported 2.348 million tons of refined oil, a decrease of 263,000 tons, or 10.1%, compared with the same period last year, and a decrease of 1.028 million tons, or 30.5%.

The imports of refined oil in February were $1215.4 million, down 19.0% and 32.7% year-on-year. Based on this, it is estimated that the unit import price is 517.6 US dollars per ton, a decrease of 17.1 US dollars per ton annually, and a decrease of 57.1 US dollars per ton year on year.

In February, China exported 3.806 million tons of refined oil, an increase of 322,000 tons, an increase of 9.2%, and a decrease of 1.614 million tons, a decrease of 29.8%.

Exports of refined oil in February were $2096.7 million, up 1.8% year-on-year and down 30.2% year-on-year. Based on this, the unit export price is estimated to be 550.9 US dollars per ton, a decrease of 3.6 US dollars per ton, and a decrease of 40.6 US dollars per ton over the same period of last year.

From January to February 2019, China imported 81,825,000 tons of crude oil, an increase of 12.4% over the same period last year. The cumulative import amount was US$359.34 million, an increase of 2.2% over the same period last year.

From January to February 2019, China imported 5.724 million tons of refined oil, an increase of 4.4% over the same period last year. The cumulative import amount was $302.7 million, a decrease of 0.7% over the same period last year.

From January to February 2019, China exported 9.226 million tons of refined oil, an increase of 21.2% over the same period last year. The cumulative export amount was $509.38 million, an increase of 18.8% over the same period last year.

There was no crude oil export in February.

From mid-late February to early March, the Jiangsu styrene market was glued with emptiness, and the situation of rigid consolidation was throughout. The reason why the post-festival market has stepped out of the stalemate is the result of the interweaving of many factors, such as peripheral factors, upstream and downstream factors, as well as the level of supply and demand of products themselves. And up to now, many factors are still intertwined and the situation is still sticky. The following is a summary of the basic factors:

Bulk commodities

Strong commodities boost confidence in the industry. After the festival, the black systems represented by threads, iron ore and coke, and the chemical systems represented by L, PP and methanol have gone strongly along the whole line. Peripheral strength, the market support for styrene is obvious, bulls take advantage of the momentum to boost.

Stock index synchronization trend is strong. In January, the Shanghai Stock Exchange Index rose rapidly from 2584.57 at the end of January to 3079.5, up 19.1%; the Dow Jones Index rose from 24837 to 26241, up 5.7%.

Raw material Market

Crude Oil: Continued production cuts in the producing countries and instability in Venezuela have tightened supply together. After the festival, the crude oil market has maintained a volatile upward trend. The Sino-US trade negotiations are progressing smoothly and the global stock market is stabilizing. The industry is optimistic about future demand. By March 5, crude oil WTI and Brent increased by 5.2% and 6.4% respectively compared with the end of January.

Pure benzene and ethylene rebound synchronously, and the production cost rises. Comparing with the end of January, ethylene CFR in Northeast Asia rose to $119, 124, or 11.2%, due to the combined effect of planned or unplanned parking and maintenance of cracking plants in Europe and Korea and batch purchasing of domestic styrene manufacturers. Many domestic styrene units were centralized overhaul, and pure styrene FOB rose slightly slowly in Korea at 8.1%.

Supply and demand level of styrene

Pure benzene and ethylene both rose, and the production cost of styrene rebounded. As of March 5, compared with the end of January, the cost of domestic non-monomerized styrene producers increased by 4%, because domestic spot prices fell during the same period, profits fell by 36%.

The plant started smoothly and profitably. In 2019, the domestic styrene industry maintained high output and high start-up rate. In February, domestic styrene production increased by 2.1% compared with January, and the start-up rate increased by 1.9 percentage points.

In January, imports of styrene reached an all-time high. In January 2019, China imported 395,400 tons of styrene, which was 18% higher than the previous month and 50.7% higher than the same period last year.

East China’s main port stock has repeatedly reached a new high, the mainstream reservoir tank capacity is tight. As of March 6, the stock of styrene in East China main port was 345,500, which was 124.7% higher than that at the end of December 2018 and 246.9% higher than that at the same time last year.

Looking at the inventory data of East China’s main ports over the years, the inventory in 2019 has repeatedly reached an all-time high. Inventory factors have become the biggest negative factor in the heavy market.

Downstream industry

Influenced by the Spring Festival holidays, except SBS industry, the start-up rate of main downstream industries of styrene dropped, among which EPS and PS decreased by 14% and 22%.

The main downstream industry of styrene maintained high profits. From January to February, the profit of EPS industry was high at 900 yuan/ton, low at 350 yuan/ton, and the average monthly level was 744 yuan/ton and 595 yuan/ton respectively; the profit of PS industry was high at 1845 yuan/ton, low at 1040 yuan/ton, and the average monthly level was 1586 yuan/ton and 1189 yuan/ton respectively; the profit of ABS industry was high at 1677 yuan/ton, low at 1100 yuan/ton, and the average monthly level was 1379 yuan/ton and 1179 yuan/ton respectively.

In early March, following the trend of commodities, Jiangsu futures spot market rebounded, stimulated by the decline of inventory in East China’s main port and the good news of the two sessions. Influenced by the buying-up-not-buying-down mentality, EPS manufacturer’s orders have been scaled up accordingly. The market trend in the second half of the year still needs to pay attention to the following aspects:

1. The change of commodity trend will directly influence the mentality of the industry.

2. The demand development of the main downstream industries and the degree of de-inventory of the main ports in East China will directly determine the supply and demand fundamentals.

3. The trend of crude oil, pure styrene and ethylene, and the change of cost will affect the mentality of the industry on the one hand, and on the other hand, determine the start-up situation of domestic styrene industry.

4. The intention of the main funds. Such a high spot inventory and slow liquidity are a double test for the main capital and the reservoir area. Whether the two can withstand the pressure and wait for the real inflection point to come remains to be seen.

E-energy circle news, since November 2018, drilling activity in most parts of the United States has stabilized, the number of drilling rigs has dropped sharply, far below the peak level.

The number of rigs often fluctuates with the price of oil, but there is a lag of several months. It will take some time for oil companies to make drilling decisions based on major fluctuations in oil prices. As a result, the sharp fall in prices in the fourth quarter of 2018 continued to spread throughout the system.

But the shale gas industry in the United States has begun to brake. As of the week ending February 22, the total number of oil rigs in the United States was 853, down from the peak of 888 in November. In particular, Permian basins are generally considered the most profitable and productive shale basins, with the number of drilling rigs falling to a nine-month low.

To be sure, output continues to rise, but growth may soon stabilize. In a report, Standard Chartered Bank analysts led by Paul Horsnell wrote: “We estimate that if the current moderate downward trend continues, the annual growth of American rigs will be negative by the end of May this year, for the first time since 2016.”

Meanwhile, oil prices have risen again, by about 25% this year. If the price of WTI crude oil exceeds $60, many shale oil producers may find that they are confident that they can invest a lot of money and put drilling rigs back into the oil field.

Nevertheless, many drilling companies have formulated more conservative and restrained drilling plans because shareholders are under pressure not to increase budgetary expenditure. According to Bloomberg and RS Energy Group, U.S. oil exploration and production companies cut their spending plans by an average of 4%, while they still expect output to grow by 7%.

Noble Energy, for example, reported a $824 million decline in fourth-quarter earnings and slashed spending plans for 2019 accordingly. The company expects to spend between $2.4 billion and $2.6 billion this year, much less than $3 billion in 2018. As oil prices fell, the company was forced to charge for impairment, resulting in some assets not available, so the loss was magnified.

According to the Houston Chronicle, David Stover, CEO of Noble Energy, said: “Recent market developments, including increased volatility in commodity prices, further highlight the need for our industry to put capital discipline and corporate returns above output growth.”

According to Reuters, crude oil traders and informants told the news agency that SOCAR, the Azerbaijani state-owned oil company, was increasing its production at Turkey’s new refinery and actively purchasing sour crude oil for the refinery, further tightening the already tight sour crude oil market in the Mediterranean and Europe.

Sources familiar with the start-up of the refinery told Reuters that SOCAR’s refinery STAR has a design and processing capacity of 200,000 barrels per day, which has now reached half of its planned capacity.

The refinery will be able to operate at full capacity next month, and SOCAR is actively purchasing Russian Ural sulphur grade crude oil as supply of sulphur and heavy crude oil in the Mediterranean and Europe tightens.

OPEC production cuts and U.S. sanctions against Venezuela and Iran have limited the supply of heavy and sulphur crude oil grades in Europe. In Europe, sulfur and heavy-grade prices, including the Russian Ural, have recently soared as markets tighten.

U.S. sanctions against Iran have restricted some of the heavy-weight classes from entering Europe. With a new round of OPEC/non-OPEC production cuts that began in January, Iraq’s light and heavy Basra, often popular in European refineries, is short of supply on the spot market in Europe, as Iraq is shifting more Basra crude oil to the high-quality market of Middle East oil producers: Asia.

International oil prices rose more than 1% on the 4th, as the Organization of Petroleum Exporting Countries (OPEC) and other major oil producers expected to extend their production cuts. Analysts said that the current trend of international oil prices is mainly affected by changes in supply and demand fundamentals. The current level of international oil prices is moderate, the supply-demand relationship lacks new guiding factors, and oil prices may be consolidated for some time.

The price of light crude oil futures for April delivery on the New York Mercantile Exchange rose $0.79, or 1.42%, to $56.59 a barrel at the close of the day. London Brent crude oil futures for May delivery rose $0.60, or 0.92%, to $65.67 a barrel.

Russia’s oil minister, Nowak, said Russia would speed up production cuts, helping boost the market on the 4th. According to Reuters, Nowak said Russia planned to accelerate the pace of crude oil production reduction this month, reaching the level promised by the cut agreement by the end of March. Russia is OPEC’s largest non-member country ally. The report also said that OPEC and its allies may decide on a new production policy in June rather than at the Vienna meeting in April. According to sources, OPEC and its allies are expected to extend the cut-off plan at the June meeting, but the final decision will also depend on the extent of sanctions imposed by the United States on OPEC member states Iran and Venezuela.

At the end of last year, international oil prices fell to their lowest level in nearly a year and a half. Affected by OPEC output cuts and other factors, oil prices in New York and Brent crude oil prices rebounded sharply. On January 1 this year, OPEC and its allies began a new round of production cuts to avoid oversupply leading to lower oil prices. Non-OPEC oil-producing countries such as OPEC and Russia have agreed to cut production by 1.2 million barrels a day for six months.

In recent weeks, crude oil prices have continued to be supported by output cuts in OPEC and its partners. In February, crude oil supply in OPEC member countries fell to a four-year low as Saudi Arabia and other countries cut production and Venezuela’s oil industry was sanctioned by the United States. By February, OPEC had fully fulfilled its commitment to reduce production by 800,000 barrels a day compared with October last year, according to a Reuters survey. In addition, exempted oil-producing countries had voluntarily cut production by 900,000 barrels a day since October, bringing OPEC’s total output reduction to 1.7 million barrels a day.

Not long ago, U.S. President Trump “shouted” to OPEC that international oil prices were too high, which led to a sharp drop in oil prices, but then quickly rebounded. Trump wants OPEC and other oil-producing countries to increase crude oil supply, but OPEC members led by Saudi Arabia disagree.

According to the Wall Street Journal, Saudi Arabia’s oil minister, Falkh, said OPEC may continue to cut production in the second half of this year. Oil producers need to be “calm” and “a long-term, cautious strategy” will avoid a global economic slowdown, Fallich said recently. As U.S. oil production and stockpiles remain high, Fallich said he tends to think production cuts may continue in the second half of the year.

In addition, to cut spending, the number of oil rigs that U.S. energy companies were looking for new reserves fell to the lowest level in nearly nine months last week. That factor is also helping oil prices recover.

However, analysts believe that the current level of international oil prices reflects the relationship between supply and demand in the market, and it is difficult to rise further before new stimulus factors emerge. Richard Gori, head of Asia operations at JBC Energy in Austria, believes that current oil prices are in a “pleasant” price range for both oil producers and consumers.

Michel Kapadia, CEO of Sun Global Investment, believes that with oil prices rising, increased oil production by U.S. shale oil producers may put pressure on oil prices in the coming months.

Crude oil production in the United States and Canada has increased recently. The U.S. Department of Energy said it would release 6 million barrels of crude oil from its strategic oil reserve base in the near future.

At the same time, the demand for international crude oil has decreased due to the expansion of new energy applications and other factors. Relevant agency data show that the market demand in the United States has been sluggish at the end of last year. Gene McGillian, an analyst at Traditional Energy, said worries about slowing economic growth and reduced oil demand weighed on international oil prices.

South Korea National Oil Corp., compiled by S&P Global Platts, showed the biggest increase in gasoline demand in January in five and a half years, driven by falling retail prices and government tax cuts, according to Seoul Energy Information.

However, as gasoline prices have begun to climb, South Korea’s demand for automotive fuel is expected to slow this year, and the government’s tax cuts will end in early May.

In January, South Korea consumed 7.33 million barrels of gasoline, up 12.6% from 6.51 million barrels a year earlier. This is the biggest increase since August 2013, when gasoline demand increased 12.8% year-on-year.

In terms of gasoline consumption, this is the largest since August 2016, when the country consumed 7.8 million barrels of gasoline during the summer driving season.

The factors driving gasoline demand also led to the fastest growth in gasoline consumption since July 2017 in January.

An official from South Korea National Petroleum Corporation said: “The rising demand for automotive fuel is mainly driven by falling retail prices and falling crude oil prices.”

This OPEC and Russia are trying to cut production, while the United States is still increasing its efforts to produce oil. Two major US oil giants, Chevron and ExxonMobil, have announced plans to intensify their efforts to exploit the country’s largest shale field.

Chevron announced Tuesday 5 ET that by the end of next year, it plans to produce 600,000 barrels of oil and gas per day in Permian Basin, Texas and New Mexico, and 900,000 barrels by the end of 2023, an increase of nearly 40% over Chevron’s expected output of 650,000 barrels per day in the next five years.

ExxonMobil announced on the same day that it plans to increase its daily oil and gas production by 80% to 1 million barrels in Permian Basin as early as 2024.

In the fourth quarter of last year, the output of ExxonMobil’s Permian Basin has surged 93% year on year. Neil Chapman, Senior Vice-President of the Division, said that Permian’s growth strategy is increasingly confident because of its unique development plan.

Wall Street has noticed that even worse for OPEC’s production cuts, the shale oil production profits of American oil giants are staggering.

ExxonMobil expects its Permina assets to deliver healthy returns even when crude oil prices are low. If the price of crude oil futures falls to $35, Permain’s assets will return an average of 10%.

Chevron CEO Mike Wirth commented that shale oil has become a large-scale game, not one that wins the fastest barrel of gold, but one that produces the strongest machines steadily.

Preliminary U.S. government estimates show that Permian Basin will produce 4 million barrels a day this month, accounting for about a third of total U.S. production. At present, the U.S. produces more than 12 million barrels of oil per day, which has reached a record high and its import volume has reached a new low.

Last Wednesday, data released by the U.S. Energy Information Agency (EIA) showed that U.S. crude oil imports fell by 1.61 million barrels a day in the week of February 22, the lowest level since 1996. Among them, 346,000 barrels of crude oil were imported from Saudi Arabia per day, a record one-week low.

From December last year to January this year, OPEC has achieved the largest reduction in production for two consecutive months. International crude oil has rebounded continuously since this year. In January, the U.S. oil distribution increased by more than 10%, the largest increase in the same period in history and in more than a decade, respectively. In the past two months, the U.S. oil distribution rose by more than 20%.

Earlier on Wall Street, Trump, for the first time since OPEC + reached a cut-off agreement in December last year, reintroduced his criticism of OPEC’s cut-off and higher oil prices, saying that “the world’s fragile economy cannot afford it”. As of Monday, however, the media had sent out news for the second time that OPEC would decide to extend the production cuts by mid-year to the end of the year.

Goldman Sachs recently reported that OPEC’s production cuts had been drastically cut from the start. With the decline in Venezuela’s crude oil production, Russia accelerated its production cuts, and global crude oil production cuts were already faster than expected. Therefore, OPEC may lift production restrictions and make new plans by May or June.

SITUATION: The SC1904 contract of Shanghai International Energy Exchange Center opened at 438 yuan/barrel, with a maximum of 443.6 yuan/barrel, a minimum of 434.1 yuan/barrel and a closing price of 434.5 yuan/barrel, down 4.8 yuan/barrel from the previous trading day, a decline of 1.09%. Volume fell back to 2519,000 hands, with an increase of 1466 to 45128 hands.

Macroscopic information: 1. On Tuesday (March 5), the Central Bank of China announced that the intermediate price of RMB against the US dollar was 6.6998, up 51 basis points from the previous trading day.

Industry chain information: 1. According to Reuters reports, OPEC sources said that OPEC and its allies may decide on a new production policy in June rather than at the Vienna Conference in April. OPEC + is expected to extend the production reduction plan at the June meeting, but it depends mainly on the extent of sanctions imposed by the United States on OPEC member states Iran and Venezuela. 2. Russian Energy Minister Alexander Nowak said on Monday that Russia will accelerate the pace of crude oil production reduction this month, and plans to reach OPEC+reduction share by the end of March or early April. 3. Libya National Petroleum Corporation said that the Shalala Oilfield will restart oil production of 30,000 barrels per day, and the force majeure of the oilfield is now lifted; it is reported that the normal production of the Shalala Oilfield is 315,000 barrels per day.

Spot price: Oman crude oil spot price of $65.3 per barrel on March 4, down 1.4 U.S. dollars per barrel from the previous day (converted to 437.8 yuan per barrel at the exchange rate of RMB on that day); Shengli crude oil spot price of $58.2 per barrel, down 1.7 U.S. dollars per barrel from the previous day.

Warehouse receipt inventory: The number of warehouse receipts designated by Shanghai International Energy Trading Center for delivery is 2.774 million barrels, which is unchanged from the previous trading day.

Summary of opinions: International crude oil futures prices show an oscillating rebound, Asian market growth consolidation, Brent crude oil futures prices to 65.4 U.S. dollars/barrel line, WTI crude oil futures prices to 56.4 U.S. dollars/barrel line, Brent crude oil and WTI crude oil prices are in the range of 9 U.S. dollars/barrel, Shanghai crude oil 1904 contract prices closed down, water discount than Brent crude oil about 0.6 U.S. dollars/barrel, compared with 4 Oman crude oil spot discount. Water is about $0.5 per barrel. According to the news, China and the United States seem to be close to reaching an agreement. The tariffs imposed by the United States on at least $200 billion of Chinese goods are expected to be withdrawn. The trade negotiations are expected to boost the market with optimism. China announced its GDP growth target of 6%-6.5% in 2019, and worries about economic slowdown still weigh on the market atmosphere. Sources said that OPEC + is expected to extend the production reduction plan at the June meeting, but mainly depends on the degree of sanctions imposed by the United States on OPEC member countries Iran and Venezuela; Russian Energy Minister Nowak said that Russia plans to accelerate the pace of crude oil production reduction this month; Saudi Arabia plans to further reduce crude oil production in March to 9.8 million barrels per day; OPEC’s statement will firmly reduce production and the geographic situation will support the oil market. In the United States, repeated high production and demand concerns continue to exacerbate market volatility, focusing on API U.S. inventory report. Technically, the forward price of SC1904 contract declined, and the forward price continued to be subject to 10-day average pressure. The lower test was supported by the 40-60 day average area. The short-term Shanghai crude oil futures price showed a high oscillation trend. Operationally, we recommend 425-448 yuan/barrel interval trading.