According to Houston Bloomberg News, as OPEC cuts production and U.S. sanctions against Venezuela begin to curb its exports, the number of foreign oil flowing into the U.S. coast is declining.

In January, OPEC and its partners’crude oil shipments to the United States fell to 1.41 million barrels a day, the lowest level in five years, according to data from cargo tracking and intelligence firm Klager. The reduction in Iraqi imports and the dramatic reduction in Saudi Arabia’s production have contributed to the decline in transport volumes.

Meanwhile, Venezuela’s exports to the United States fell by nearly 30%. The reason is that nearly half of the crude oil has not yet entered the U.S. ports, and U.S. sanctions may leave the remaining crude oil in the Gulf. According to Kogler, nearly 7.6 million barrels of Venezuelan crude oil are floating in the Gulf of Mexico.

I. Basic Situation of Industry Operation

(1) Production has increased steadily and investment has recovered. In 2018, the output of ten kinds of non-ferrous metals was 56.88 million tons, an increase of 6% year on year. Among them, the output of copper, aluminium, lead and zinc was 9.03 million tons, 35.8 million tons, 5.11 million tons and 5.68 million tons, respectively, which increased by 8.0%, 7.4%, 9.8% and -3.2% year on year, while the output of copper and aluminium was 17.16 million tons and 45.55 million tons, respectively, which increased by 14.5% and 2.6% year on year. In 2018, the investment in fixed assets in non-ferrous industry increased by 1.2% year on year. Among them, the investment in mining and mineral processing decreased by 8% year on year, while the investment in smelting and processing increased by 3.2% year on year. The scale expansion has shifted to increasing technological innovation such as environmental protection and safety, as well as research and development of high-end materials and new technologies.

(2) Price volatility has fallen, and the benefits of the industry have declined substantially. In 2018, the average spot prices of copper and lead were 50689 yuan/ton and 19126 yuan/ton, respectively, rising by 2.9% and 4.1% year-on-year respectively, with an increase of 26 and 22 percentage points. The average spot prices of aluminium and zinc were 14262 yuan/ton and 23674 yuan/ton respectively, down by 1.8% and 1.7% year-on-year. The main business income of non-ferrous Enterprises above the scale is 5428.9 billion yuan, an increase of 8.8% over the same period of last year; the profit of 185.5 billion yuan, a decrease of 6.1% over the same period of last year; the profit of mining and processing is 41.6 billion yuan, which is the same as that of last year; the profit of smelting and processing is 67.9 billion yuan and 75.6 billion yuan, respectively, a decrease of 10.2% and 5.6% over the same period of last year, especially that of aluminium industry, whose profit declines by

(3) The situation of import and export has changed and positive progress has been made in overseas investment. The annual export of unwrought rolled aluminium and aluminium products was 5.8 million tons, an increase of 20.9% over the same period of last year. With the implementation of the policy of prohibiting foreign garbage entry, the import of copper scrap dropped 32.2% and the import of refined copper increased 15.5% year on year. Overseas resources development has been vigorously promoted, and overseas projects such as China Aluminum Group, Minmetals Group, Zhongjin Lingnan and Weiqiao have made new progress.

(4) Structural reform on the supply side has been deepened and the transformation and upgrading of the industry has been accelerated. Production capacity control and restructuring achieved results. More than 3.3 million tons of electrolytic aluminium production capacity was transferred to energy-rich areas such as Inner Mongolia and Yunnan through capacity replacement. China Aluminum integrated Yunnan metallurgy, Shandong Weiqiao Holdings Co., Ltd. and other joint restructuring continued to advance. De-leveraging has made progress, with the industry’s asset-liability ratio of 62.2%, down 0.6 percentage points from a year earlier. With the acceleration of filling plate, 7050 full-size aluminum alloy thick plate has been licensed to install, aluminum air battery and nano-ceramic aluminum alloy have been industrialized, energy consumption of copper and aluminium smelting has been declining, and the level of green development has been continuously improved.

II. Problems Faced

(1) Costs are rising and consumption is sluggish, and the pressure on the operation of the industry is increasing. From the production side, affected by the rising cost of raw and auxiliary materials such as minerals, raw materials, coal, electricity and the increasing investment in environmental protection, the main business income cost per 100 yuan in the industry in 2018 is higher than the average industrial level of 3.97 yuan, an increase of 0.58 yuan over the same period of last year, especially the average comprehensive cost of electrolytic aluminium. From the consumer side, the traditional consumption fields such as real estate, electricity, automobile and household appliances continue to weaken, and the new application fields with large quantity, wide range and strong driving force need to be expanded. In addition, private enterprises are an important part of the non-ferrous industry, but because of the high cost of financing and heavy non-operational burden, there are still barriers in undertaking major projects and other aspects, and the development pressure is greater.

(2) The low-end surplus and shortcomings are prominent, and the deep-seated problems of industrial structure are prominent. Strictly controlling the new capacity of electrolytic aluminium is still arduous. There is a risk of overcapacity in some low and middle-end processing areas. There is also a rapid expansion of stage capacity in some emerging areas such as lithium salts and precursors of ternary materials. There are shortcomings in high-end materials and green smelting. The key non-ferrous materials for aerospace and integrated circuits are still dependent on imports. In 2018, the unit price of aluminium imports is 1.9 times that of exports. Some smelting industries still lack industrialized technical support to achieve special emission limits. Pollution prevention and control is still an important bottleneck restricting the green development of the industry.

(3) The international trade situation is complex and the development environment is becoming increasingly severe. With the increase of uncertainties in the global economic trend and the substantial impact of trade friction, it is difficult to sustain the sustained growth of aluminium exports. The blockage of exports of non-ferrous terminal consumer goods such as electromechanical, automotive and other non-ferrous consumer goods will also increase the pressure of industry operation. Because of the strong financial attribute of non-ferrous metals, the indirect impact of trade frictions on the industry is even greater than the direct impact, impacting market confidence, prices and investment, affecting the development of the industry.

Key Work in 2019

(1) Make excellent increments and accelerate the innovative development of new non-ferrous materials and new formats. We will expand the upstream and downstream cooperation mechanism of civil aircraft aluminium materials into the cooperation mechanism of civil aircraft materials, promote the implementation of key annual tasks, track the progress of new energy vehicle platform construction, strengthen supervision and coordination, and form annual symbolic work results. Implementing the new material “filling board”, establishing the database of non-ferrous new materials and the industry testing and evaluation center, and improving the basic system of non-ferrous new materials. At the same time, we should promote the deep integration of non-ferrous industry and the Internet, build advanced non-ferrous metal industry clusters, expand application areas, and explore new modes and new formats of industry development.

(2) Optimizing stock and improving the level of intelligent and green development of industrial chain. To formulate guidelines for the construction of intelligent mines and factories for non-ferrous metals and guide the construction of intelligent standardization in the industry. Focusing on the green manufacturing shortcomings of traditional industries such as copper, lead, zinc, tungsten and magnesium in green smelting, ultra-low emission, harmless disposal of waste residue and comprehensive utilization of resources, we should speed up the research and development and promotion of applicable technologies, guide some industrial agglomeration areas to carry out technology supply-demand docking, and guide enterprises to accelerate green development.

(3) Coordinating policies to promote the standardized development of the industry. Promote the structural reform of the supply side, continue to maintain the high-pressure situation of strictly controlling the new capacity of electrolytic aluminium, strictly implement capacity replacement, and guide the high-quality development of alumina and electrolytic aluminium industry through market-oriented and legalized ways. Strengthen policy coordination and service, coordinate and promote industry cost reduction, form a development pattern of mutual promotion between state-owned enterprises and private enterprises, consolidate Sino-Russian cooperation mechanism, improve foreign cooperation platform, guide industry to cope with trade frictions and deepen international cooperation. Revising and promulgating industry normative conditions, reforming management methods, and strengthening the guiding role of normative conditions in promoting industry technological progress and normative development. Strengthen the analysis of hot issues, stabilize market expectations, and promote the smooth operation of the industry.

With the completion of Hengli Petrochemical’s 20 million tons/year refining capacity, China’s refining capacity reached 831 million tons/year by the end of 2018. On January 16, the China Petroleum Economic and Technological Research Institute released the Report on the Development of Oil and Gas Industry at Home and Abroad in 2018 (hereinafter referred to as the “Report”), pointing out that, judging from the comprehensive scale, product quality, energy consumption and integration level, the domestic refining capacity in 2018 was at least 190 million tons per year surplus.

With the rapid growth of refining capacity, the domestic refining industry must accelerate the transformation and upgrading, and further take the road of high-quality development. At the same time, the rise of private advanced refineries and the integration and transfer of traditional local refineries will continue to affect the overall pattern of the refinery industry.

Rapid Rise of Large-scale Geotechnical Refining as the Main Force of New Capacity Increase

According to the data of the Report, in 2018, Hengli Petrochemical Company had 20 million tons/year refining capacity, and China added 33.9 million tons/year refining capacity. At the same time, according to incomplete statistics, six local refineries, such as Haike Chemical, Xinhai Petrochemical and Kokoda Petrochemical, have eliminated a total of 11.65 million tons per year of refining capacity. In total, China’s annual net oil refining capacity increased by 22.25 million tons per year, with private refineries as the main growth force.

From the data, it can be seen that the transformation and upgrading of local refineries are accelerating and showing a trend of differentiation. With the strong support of the local government, some large private enterprises listed in the top 500 of China continue to promote the construction of large-scale refining and petrochemical integration projects with bases, scale, advanced technology and “main oil and auxiliary”. In 2018, Hengli Petrochemical will build 20 million tons/year refining capacity; in 2019, Zhejiang Petrochemical (Phase I) will be built, adding 20 million tons/year refining capacity. By 2020 alone, with these two enterprises, China will add 40 million tons/year refining capacity.

The report points out that with the successive production of large-scale local private refining projects, China’s crude oil processing capacity will increase by 32 million tons per year in 2019, its total refining capacity will reach 863 million tons per year, and its excess capacity will rise to 120 million tons per year. The refining capacity of private enterprises will increase to 235 million tons per year, and the proportion of refining capacity in China will increase to 27.2% from 25.6% last year. The number of ten million tons of refineries in China will increase to 29, of which two are from private enterprises and the scale is world-class.

The data show that Shenghong Petrochemical Company has built 16 million tons/year refining capacity, Zhejiang Petrochemical Company (Phase II) 20 million tons/year refining capacity is under planning, 15 million tons/year petrochemical industry and 16 million tons/year refining capacity of Huatong Jinggang Petrochemical Company are being publicized by the sea, the latter is for introducing foreign investment projects, 20 million tons/year refining capacity of Xinhua Petrochemical Company is being publicized by environmental assessment, and Shida Science and Technology 15 million tons/year refining capacity is being publicized. Ten thousand tons/year refining capacity has entered the approval stage. These capacity may be released by 2025.

Accelerate the integration of backward production capacity and accelerate the elimination of small and medium-sized refineries

With the rise of large private refineries, some small and medium private refineries are accelerating their integration. Shandong Province is the centralized area of China’s georefining, with the production capacity exceeding 60% of the total capacity of georefining. The largest sales area of refined oil in Shandong Province is Shandong Province. Outward radiation can be transported by steam to North and Northeast China, by rail to Northwest and Southwest China, and by water to East and South China.

In recent years, the state has gradually increased its efforts to eliminate and integrate backward refining capacity. On January 9, 2018, China issued the Notice on the Special Treatment of Serious Violations and Breaches of Credit in the Oil Refining Field, which focused on the treatment of serious violations in capacity building, safety, environmental protection, energy conservation, quality, taxation and operation of petroleum products produced from crude oil and fuel oil by processing and refining. Enterprises with dishonest behavior. The circular further implements the industrial policy requirements of “Guiding Opinions of the General Office of the State Council on the Structural Adjustment of the Petrochemical Industry to Promote Transformation and Increase Benefits”, “Guiding Catalogue of Industrial Structure Adjustment (2011 edition) (Amendment)” and “Planning and Distribution Plan for the Petrochemical Industry” (Development and Reform Industry [2014] 2208), and strictly prohibits the construction of new and expanded refining units without authorization.

According to the statistics of the China Petroleum and Chemical Industry Federation, in the first half of 2018, the number of enterprises of more than 1666 sizes decreased nationwide. Among them, there are 1288 refining and chemical enterprises (123 refining and 1565 chemical enterprises).

Also at the beginning of the year, the announcement on issues related to the levy and management of refined oil consumption tax (State Administration of Taxation Announcement No. 1, 2018) blocked tax avoidance loopholes in raw materials. The VAT reform implemented in May has blocked the tax avoidance loopholes in the factory to a certain extent and further rectified the market.

Due to the intensification of renovation efforts, Shandong Geotechnical Refining has also developed differently. According to the principle of “optimization and restructuring, reduction integration, high pressure and low pressure, and integration of refining and chemical industry”, Shandong Province will transfer the reduction integration step by step for local refineries with refining capacity of 5 million tons per year or less, and the reduction and reduction refining capacity will be 1/3 by 2025. At the same time, refineries have accelerated downstream extension, from “one oil dominant” to “both oil and petrochemical” transformation.

Take a differentiated and environmentally friendly road to cope with fierce market competition

The pattern of diversified competition has been formed and will develop with the further development of China’s petrochemical industry. In the oil refining field, BP will build a new 200,000 tons/year lubricating oil blending plant in Tianjin in the third phase, and Shell will build a 10,000 tons project in Qingdao in the second phase of refining catalyst. In the field of oil sales, BP will build 1000 gas stations in China in the next five years. Shell also has plans to build large-scale additional gas stations.

For refining and chemical enterprises, under the increasingly fierce market competition, we must continue to vigorously eliminate backward production capacity, strictly control the increment, and replace backward production capacity with advanced production capacity. For the whole refining industry, we should continue to promote the construction of refinery bases, parks and regionalization. It is suggested that some fuel refineries should turn to material refineries in combination with the characteristics of crude oil and equipment, and pay attention to the development of differentiation and specialization.

It should be noted that 2018 has been described by many media as the “environmental storm” year. In the new year, the intensity of environmental renovation will not decline. Over the past year, China’s main refineries have completed the upgrading of oil quality and the replacement of oil products. Some local refineries also have the ability to produce the 6-standard refined oil by introducing advanced technology. In 2019, China will supply all kinds of gasoline and diesel oil to the country 6. Refineries should arrange reasonable dispatch and replacement of gasoline and diesel oil to achieve a smooth transition.

At the same time, the report pointed out that domestic refineries should continue to promote energy saving and emission reduction, and promote advanced energy-saving technologies, such as enhanced coke burning in catalytic cracking units, high-efficiency stripping in catalytic cracking units, and accelerate the upgrading and transformation project construction, such as focusing on sewage treatment upgrading, sulfur and yellow tail gas treatment and other special treatment projects.

According to sources, Sierra Leone Mining Holdings Limited plans to export 600,000 tons of bauxite to China in 2019.

According to the source, the annual production capacity of the company’s bauxite mine is 2.4 million tons, and in 2018 it will reach 2 million tons. Bauxite production is expected to reach 2.3 million tons this year. It is reported that the company will build two new washing plants, which are expected to be put into operation in July this year. The monthly output of bauxite is expected to increase from 160,000 tons to 200,000 tons.

At present, the company mainly exports bauxite to Romania and Canada, with no stock in hand.

The producer mainly produces 49-50% active silica and 3.5% Max bauxite. At present, the price is US$37-38 per ton offshore from Sierra Leone and the freight to China is US$20-23 per ton.

They will use ships with a cargo carrying capacity of 55,000 tons.

It has been learned that recently, the International Energy Agency (IEA) officially released World Energy Outlook 2018 (hereinafter referred to as “Outlook”) in Beijing. The report looks forward to the global energy development prospects by 2040, and gives high affirmation to the development of new energy in China.

At the Outlook conference, Laura Koch, chief energy model officer of the International Energy Agency, said: For economies that rely more on light industry, services and digital technology, electricity is increasingly becoming the preferred “fuel”. By 2040, electricity demand will increase by 90% compared with the current demand, which is nearly twice the current demand for electricity in the United States; nearly half of all cars in the world will be electric vehicles, and the proportion of electricity in the final energy consumption will increase to nearly one third.

Ms. Laura Koch also said that at present, China has become a global leader in carbon emission reduction, leading the world in the development of wind power, photovoltaic, electric vehicles and emerging low-carbon technologies, but its core still needs to explore how to further accelerate the pace of China’s low-carbon development on the basis of affordable economy and achieve the popularization and application of low-carbon technologies. At the same time, China also needs to focus on how to further enhance the flexibility of the power system in order to further achieve large-scale access to renewable energy.

Prospect points out that by 2040, 20% of the increase in global electricity demand will come from China’s motor demand. This forecast is also in line with the actual situation of electric vehicle manufacturing and market worldwide. China is already the leader of the electric vehicle industry. In the future, China’s leading edge will continue to be maintained.

Prospect shows that with the increasing competitiveness of solar photovoltaic, its installed capacity will exceed wind power by 2025, hydropower by 2030 and coal power by 2040. The proportion of renewable energy generation will increase from 25% to 40%. China’s nuclear power output will surpass that of the United States and the European Union by 2030. The promotion of global carbon emission reduction depends on China’s contribution.

While highlighting new energy sources, Prospect also analyses the future development trend of global oil and gas: car oil consumption will peak in the next five years or so; however, petrochemical, truck, aircraft and shipping industries will still make oil demand rise; by 2025, the proportion of the United States in the growth of global oil and gas production will reach more than half.

In addition, nearly a fifth of the world’s oil and a quarter of its natural gas are produced in the United States; the shale revolution will put tremendous pressure on traditional oil and gas exporters; and natural gas will surpass coal as the second largest fuel in the global energy structure. Global natural gas use will grow by 45% by 2030.

Under the trend of global energy transformation and the fourth industrial revolution, China will play an increasingly important role. Nowadays, China’s photovoltaic industry and electric vehicle industry have become national business cards, and more new energy industries are developing rapidly. China is also a firm supporter of the Paris Accord and will contribute to and set an example for the global carbon reduction.

With the development of China’s “coal to gas” project, the demand for natural gas has increased sharply, while domestic production is far from being met, and natural gas imports have increased substantially. In 2017, China’s LNG imports surpassed that of Korea and became the second largest LNG importer in the world after Japan. In 2018, China surpassed Japan and Germany to become the world’s largest natural gas importer.

According to Ann Xunsi’s statistics, in 2018, Japan imported 82.93 million tons of LNG, China imported 53.76 million tons of LNG, plus about 51 billion cubic meters of pipeline gas imported from Central Asia and Myanmar. According to the data released by the General Administration of Customs, the total import of natural gas in China reached 90.39 million tons in 2018, an increase of 31.9% over the previous year. With the improvement of infrastructure such as pipelines and LNG receiving stations, the scale of China’s natural gas imports will be further expanded.

According to the International Energy Agency (IEA) Natural Gas Report 2018, China’s natural gas demand is expected to grow by 60% by 2023 due to air pollution reduction policies. China is expected to account for 37% of global gas consumption growth between 2017 and 2023. By 2023, the proportion of imports in China’s natural gas supply will rise from 39% to 45%.

In 2019, some large copper producers have published their copper output reports in 2018. SMM has sorted out the copper output of several well-known copper mining enterprises in 2018 and their planned output in 2019 for readers’reference. Meanwhile, SMM predicts that the global copper production will increase by about 500,000 tons in 2019, with a growth rate of 2.4%.

Antofagasta’s annual copper output in 2018 was 725,300 tons, up 3% from a year earlier.

Antofagasta’s copper production jumped to 220,000 tons in the fourth quarter of 2018, up 16.8% from the previous quarter and 177,800 tons in the same period last year. The company’s total copper output in 2018 was 725,300 tons, an increase of 3% over the previous year. The company expects to increase capital expenditure by 2019, expected to reach $1.2 billion, some of which will be used to expand its Luos Pelambres mine in Chile. Copper production in the mine already accounts for half of Antofagasta’s copper production.

The latest news company is evaluating a project to build a new concentrator at Centinela Mine at a cost of about $3 billion. The company expects copper production to be between 750,000 and 790,000 tons in 2019.

Copper output of Minmetals Minerals decreased by 15% to 386,800 tons in 2018

Minmetals Resources (01208) announced that Kinsevere produced 185,000 tons of electrolytic copper in the fourth quarter of the three months ending December 31, 2018, a 9% decrease over the same period last year. In 2018, the output of Kinsevere electrolytic copper was 79.7 million tons, a decrease of 1% compared with the same period last year. The company’s copper output totaled 386,800 tons, down 15% year-on-year; zinc output 223,000 tons, up 198% year-on-year; lead output 454,000 tons, up 71% year-on-year; molybdenum output 1961 tons, up 37% year-on-year.

OZ Minerals Australia’s copper production in 2018 was better than expected by 3.5% year-on-year growth.

On January 23, Australian mining giant OZ Minerals announced that gold and copper production in 2018 was better than expected. Oz said that copper production in 2018 was 115,998 tons, including 110,111 tons of copper from the large Prominent Hill mine, which was higher than the previously estimated range of 100,000 to 110,000 tons. The mine’s copper output in 2017 was 112,008 tons. Oz Minerals expects to produce 95,000-105,000 tons of copper in January last year.

Oyu Tolgoi expects to produce 125,000-155,000 tons of copper in 2019 and become the third largest copper producer in the world by 2025.

Oyu Tolgoi expects to produce 125,000-155,000 tons of copper this year. In 2018, Mongolian copper and gold mines will produce 159,100 tons of copper, an increase of 1.1% over 2017. Turquoise Hill expects Oyu Tolgoi copper production to peak in 2025 and become the third largest copper producer in the world. Turquoise Hill expects the company to produce more than 550,000 tons of copper and more than 450,000 ounces of gold annually from 2025 to 2030, both from the Oyut open pit and the Hugo North (Lift One) underground mining project. Turquoise Hill said open-pit mining is expected to enter Phase 4 this year, with plant capacity expected to be about 40 million tons. Meanwhile, the company expects underground development to advance 15-16 kilometers.

Rio Tinto: In 2018, copper production in mines increased by 33% to 633,500 tons compared with the same period last year.

Rio Tinto PLC, Australia, released its operating report for 2018 in mid-January, in which it reported that copper production in mines in 2018 was 633,500 tons, an increase of 33% over the previous year. It is estimated that the output of copper in mines will be between 550,000 and 600,000 tons in 2019, and that of refined copper will be between 220,000 and 250,000 tons in 2019. For its Kennecott Copper Mine, the company said last year’s copper production grew by 37% year-on-year, as mining continued to be active in a high-grade open-pit copper production area and production efficiency improved.

First Quantum has a record copper production and sales in 2018

The Toronto Stock Exchange-listed Copper Miner First Quantum Corporation announced record copper production and sales in 2018. The total output of copper in 2018 was 605,853 tons, and 573,963 tons in 2017, an increase of 6% over the previous year. Copper sales in 2018 were 596,513 tons and 580,130 tons in 2017, an increase of 3% over the previous year.

The output of copper in Kansanshi mine in Zambia increased from 250,801 tons in 2017 to 251,552 tons in 2018; the output of Mauritania decreased slightly to 28,137 tons (28,791 tons in 2017); the output of Piayeli mine in Turkey increased by 19,896 tons (compared with 16,523 tons); the output of copper in Pyhsalmi mine in Finland decreased from 13,501 tons in 2017 to 11,904 tons, with sales falling from 13,691 tons. Tons fell to BHP Billiton’s copper production in 2018 is basically the same as last year’s target increase of copper production in 2019

BHP Billiton cancelled the sale of Cerro Colorado Copper Mine and increased its copper production target to between 1.645 million tons and 1.74 million tons. In the second half of 2018, the group output converted by copper production remained basically unchanged, and the annual output is expected to be the same as last year. It is expected that all major assets of the Group will meet the annual unit cost target, which is in line with the higher expected output in the second half of the year. However, due to the planned equipment maintenance and shutdown events, unit cost in the second half of 2018 exceeded the guidance target for the whole year.

In the second half of 2018, unplanned production disruptions at Olympic Dam, Spence Copper and WAIO resulted in some impacts on production during the half-year reporting period up to the end of December 2018, resulting in a negative impact of about $600 million.

China’s crude oil import has steadily increased with the continuous decline of domestic crude oil production and the continuous increase of refining capacity.

According to the General Administration of Customs, China’s crude oil imports increased by 10.1% to 462 million tons in 2018. Among them, Russian crude oil imports reached 71.49 million tons (or 1.43 million barrels per day), up 19.7% year on year, accounting for about 15.47% of the total domestic crude oil imports.

In December 2018, China imported 1.658 million barrels per day of Russian crude oil, 1.64 million barrels per day of Saudi crude oil, and 540,000 barrels per day of Iranian crude oil, with zero imports of American crude oil.

Russia has been China’s largest supplier of crude oil for three consecutive years. The production of Sino-Russian oil pipeline, shorter transportation distance and flexible transportation mode determine the advantages of Russian crude oil to China, and also lead to the continuous growth of Russian crude oil imports.

China’s largest source of crude oil imports has been Saudi Arabia for more than a decade.

In 2016, with an annual supply of 52.38 million tons, Russia surpassed Saudi Arabia to become China’s largest supplier of crude oil, and maintained steady growth. In 2017, China imported 59.8 million tons of Russian crude oil, an increase of 13.95% over 2016.

In 2011, the Sino-Russian crude oil pipeline with a total length of nearly 1,000 kilometers was put into operation, which opened the history of crude oil pipeline transportation between China and Russia. In January 2018, the second-line project of Sino-Russian crude oil pipeline was put into operation, with a designed capacity of 15 million tons per year. So far, Russia can transport 30 million tons of oil to China through pipeline every year.

The Sino-Russian crude oil pipeline is one of the four major energy strategic channels in China and the largest import channel of onshore crude oil in China. It undertakes the tasks of diversifying China’s oil and gas imports, improving people’s livelihood and ensuring energy security.

According to Harbin Customs data, in 2018, Heilongjiang ports imported 27.252 million tons of crude oil from Russia, an increase of 67.1% over the same period of last year, and the total import value reached 96.04 billion yuan, an increase of 1.2 times over the same period of last year.

Domestic crude oil production has declined for three consecutive years due to factors such as resource conditions, low international oil prices, poor economic benefits and inadequate upstream investment. Domestic crude oil production was 199 million tons in 2016, 191 million tons in 2017 and 190 million tons in 2018, respectively.

But the domestic crude oil processing volume is steadily increasing. The general export quota of refined oil issued by the Ministry of Commerce also boosts crude oil processing. According to the data of the National Bureau of Statistics, in 2018, the domestic crude oil processing volume exceeded 600 million tons, an increase of 6.8% year on year, and the growth rate was 1.8% faster than the previous year.

In the fourth quarter of 2018, international oil prices fell sharply, China imported and stored oil in large quantities, and China’s refineries also started full capacity production, which promoted the growth of domestic imports of crude oil.

According to the General Administration of Customs, China imported 43.782 million tons of crude oil in December 2018, a new monthly record high of 2.12% year-on-year growth after November. In November, China imported 42.872 million tons of crude oil, an increase of 16% over the same period last year.

In 2018, China’s dependence on foreign oil approached 70%, reaching 69.8%.

China surpassed Japan to become the world’s largest importer of natural gas in 2018, and will continue this trend, according to the “Development Report of Oil and Gas Industry at Home and Abroad 2018″ issued by the Institute of Economic and Technological Research of PetroChina Group.

The report also points out that there is no causal relationship between oil dependence and energy supply security. Oil supply security is also affected by factors such as the stability of import sources, channel security and reserve level. As long as we increase domestic oil and gas exploration and development, ensure the diversification of import sources and channels, improve reserve capacity and guarantee channel safety, high external dependence will not necessarily lead to supply crisis.

In 2018, the abolition of chemical fertilizer export tariffs, the promulgation of a series of fertilizer standards, the promulgation of soil environmental protection law, the bankruptcy and reorganization of a number of large fertilizer enterprises, and the acceleration of industry integration all set the stage for the trend of 2019.

There is no doubt that the fertilizer industry will become more orderly, efficient, professional and environmentally friendly in the future. However, what specific policies are most likely to land and what changes will take place in the existing industry layout? Following are the ten predictions of the agrochemical industry. Welcome the broad masses of people in the industry to brainstorm and make a good start with confidence in the New Year.

Prediction 1: Fertilizer packaging label will change the trace elements no longer invisible

Prediction Reason: Due to industry standards, the trace elements in compound fertilizers (compound fertilizers) can not be marked on packaging containers and quality certificates. With the popularization of medium and trace elements in agricultural production, enterprises call for the lifting of restrictions. In 2017, the Ministry of Industry and Information Technology and other three departments completed the revised submission of “Contents and Requirements of Fertilizer Labeling”. The revised version of “Contents and Requirements of Fertilizer Labeling” lifted the restrictions on the identification of medium and trace elements, but the promulgation time has not yet been determined.

The industry standard of “Fertilizer Marking Contents and Requirements” clearly stipulates that if compound fertilizers (compound fertilizers) are added with medium and trace elements, they shall not be marked on packaging containers and quality certificates; and that medium-element fertilizers shall be separately marked with the sum of the nutrient contents of each medium element and the nutrient contents of the medium element, and the single medium element with the content less than 2% shall not be marked.

In recent years, more and more fertilizer enterprises and growers have realized the importance of medium and trace elements in agricultural production, but the addition of medium and trace elements in compound fertilizers by fertilizer enterprises can not be marked, and the content of medium elements less than 2% in fertilizers can not be marked. In recent years, enterprises have appealed for the lifting of restrictions. After the final examination and approval of the revised version of “Contents and Requirements of Fertilizer Labels” is passed, the State Council will approve the issue or authorize it to be issued, and the time for its introduction has not yet been determined. Will it be launched in 2019? Let’s wait and see!

Prediction 2: Biostimulin China Standard is on the agenda

Predictive Reasons: Due to the lack of industry standards, the vague concept of biostimulant and the absence of classification standards, it can not reflect the special functions and practical effects, which makes product registration difficult and difficult to promote in the market.

In recent years, biostimulant has developed rapidly at home and abroad, but in the promotion, it is facing such prominent problems as confusion of concepts, small scattered industries, more Li ghosts than Li Kui, bad coins to expel good coins, more concept speculation than product innovation, lack of scientific use technology, deification of its function and role, which seriously affects the healthy development of biostimulant market.

At present, the European Union has defined biostimulant as a substance containing certain components and microorganisms that stimulate the natural processes of plants when applied to plants or roots, including enhancing/facilitating nutrient uptake, nutritional efficacy, abiotic stress resistance and crop quality, independent of nutrient components, and has issued industry standards. At present, China is speeding up the process of formulating industry standards for biostimulants. In April 2018, Stanley convened an intra-industry meeting. Through in-depth analysis of the European standards for biostimulants, the purpose is to focus on biostimulants in the industry. In May, Southern Rural Daily sponsored a conference on biostimulants to focus on industry hotspots again. The National Committee for Standardization of Fertilizers and Soil Conditioners proposed that biostimulants It is defined as a substance that promotes plant growth and improves stress response and crop quality, and promotes the landing of the standard.

Data show that China has issued national standards for biostimulants, including GB/T 33804-2017, GB/T 34765-2017, determination of fulvic acid content from mineral sources, GB/T 35112-2017 agricultural humic acid and raw material products of fulvic acid, etc. The published industrial standards include HG/T 3278-2011 agricultural humic acid sodium, HG/T 5045-2016 humic acid urea, HG/T 5046-2016 humic acid urea, etc. Phytic acid compound fertilizer, HG/T 5050-2016 alginic acid fertilizer, etc.

However, as far as the existing relevant standards are concerned, some components, mechanisms and metabolites can not be measured, and the lack of registration certificates for biostimulant products makes it difficult to promote. It is urgent for biostimulant industry standards to come out to promote better and healthier development of the industry. In 2019, the Chinese standard for biostimulants will be put on the agenda.

Forecast 3: Potassium hypertrophy contract in 2019 will exceed $300 per ton?

Reason for Prediction: This prediction is not what farmers expect. Potassium fertilizer is rising sharply all over the world. It is not easy for China to get the price of $290 per ton CFR. It is speculated that in the current trend, potash fertilizer will exceed $300 per ton in 2019.

After nine months of negotiation, the joint negotiating group of Chinese potash fertilizer finally reached an agreement with BPC (Belarus Potassium Fertilizer Company) on the contract for the import of potash fertilizer by sea for 2018/2019. The contract price is US$CFR290 (ton price, the same below). Although the price is 60 dollars higher than the contract price in 2017, it is still significantly lower than the increase in South America and other places.

Although the final price of the negotiation has increased by 60 US dollars compared with last year, the price of 290 US dollars/ton CFR is still a low price area, which is in line with the current international market situation. With the increase of US$370/ton CFR in Europe, US$310-320/ton CFR in Southeast Asia and the increase of demand for potash fertilizer in the international market, while the demand of domestic market is decreasing, some regional prices may continue to rise slightly after the release of demand. It is possible that the potassium hypertrophy contract will exceed US$300/ton in 2019.

Forecast 4: Organic fertilizer industry standards are expected to improve

Predictive Reasons: The current standard of organic fertilizer was formulated in 2012, while the current plan of organic fertilizer substitution for chemical fertilizer was formally put forward in 2017. There is a big time lag between the standard and policy, and it is difficult to meet the development needs of the industry. Farmers have a vague understanding of the concept of organic fertilizer, and some enterprises speculate skillfully, cut corners, and even use isoflavones as organic pellets from soybean industrial processing wastes. Fertilizer and organic fertilizer market urgently need to be restrained by upgrading industry standards.

The starting point of formulating standard technical parameters of organic fertilizers is to maximize the use of various organic solid wastes and increase soil organic matter. However, due to the low attention paid to organic fertilizers and insufficient market recognition at that time, most organic fertilizer enterprises presented small and scattered operating conditions, and production technology, production technology and good production environment were difficult to guarantee.

At present, some special industries, such as tobacco, have begun to formulate local standards on the basis of the current organic fertilizer standards, further refine the organic fertilizer standards in terms of organic fertilizer production technology and environmental requirements, the use of special maturing bacteria, the use of aerobic fermentation instead of anaerobic fermentation, and are actively applying for industry standards. Organic fertilizer industry urgently needs the improvement of industry standards to sort out the industry and eliminate backward production capacity. The author believes that the national standard of organic fertilizer in 2019 will be greatly possible to upgrade. The upgrade rules may be embodied in the direction of organic matter content, whether to specify organic matter as active organic matter, organic fertilizer production technology and environmental requirements.

Forecast 5: Industry Integration and Speeding up Chemical Fertilizer Industry Concentration

Predictive Reasons: Pressure of environmental protection prompts large-scale shutdown and rectification of fertilizer enterprises in China. Pressure of operation forces many fertilizer enterprises to go bankrupt and restructure. The reshuffle of fertilizer industry will speed up again, and fertilizer production will be more concentrated in 2019.

Under the pressure of environmental protection, backward production capacity has been eliminated and enterprise product line has been upgraded and speeded up. In August 2018 alone, 620 converted chemical enterprises were shut down in Shandong Province, 2614 of which accounted for 42.5% of the total chemical enterprises in the province. The Guangdong Environmental Protection Department issued a document calling for the special action of “scattered and dirty” enterprises and the comprehensive renovation of clusters. Only 4824 “scattered and dirty” enterprises have been eliminated and renovated in Dongguan City.

Compound fertilizer industry has entered the competitive stage of comprehensive strength such as quality, brand, capital, technology and service, and the industry integration is on the way. The bankruptcy tide of backward and poorly managed enterprises has further intensified, and large enterprises have suffered losses to varying degrees. Yankuang Lunan Chemical Fertilizer Plant, a subsidiary of the World 500 Fortified Fertilizer Enterprise, was declared bankrupt due to the accumulation of 3.7 billion yuan; Jiangxi, a chemical subsidiary of six countries, applied for bankruptcy restructuring; Sinochem International acquired Yangnong Group for nearly 6.1 billion yuan; and Inner Mongolia Ordos United Chemical Company, a subsidiary of Hubei Yihua, was forced to shut down due to the limited supply of natural gas in winter.

Taking nitrogen fertilizer as an example, China’s nitrogen fertilizer production enterprises reached a peak of more than 200, with a capacity of more than 6 million tons. Nowadays, nitrogen fertilizer production enterprises have been reduced to more than 60, with a capacity of more than 50 million tons. The development of nitrogen fertilizer industry tends to concentrate. In addition, some nitrogenous fertilizer producers are involved in the field of compound fertilizer and new fertilizers to make their products more competitive. For example, Xinlian, Henan Province, not only has the world-class coal-based urea production line, the largest urea production line in China, but also blossoms on compound fertilizer, humic acid-containing fertilizer, water-soluble fertilizer and other high-efficiency fertilizers, thus further enhancing their comprehensive competitiveness.

Prediction 6: Potassium Fertilizer Export Increases Greatly and Chemical Fertilizer Export Decline Overall

Predictive Reasons: The “Tentative Tax Rate for Import and Export in 2019″ proposed that on January 1 this year, zero export tariffs should be imposed on chemical fertilizers and other commodities. The Zero Tariff Scheme will have a greater impact on the export of potassium fertilizer, compound fertilizer and phosphate ore. In particular, domestic processed potassium sulfate and potassium nitrate will have a greater price advantage in the international market. This will certainly stimulate the export of potassium fertilizer to increase, and the export of chemical fertilizer will stop declining as a whole.

In recent years, domestic potassium fertilizer production and processing technology has improved, processing potassium sulfate, potassium nitrate, granular potassium fertilizer and other industries have developed rapidly. With the abolishment of export tariffs on potassium fertilizers (including potassium fertilizers), the export of potassium chloride (fertilizer grade) and potassium sulfate can save 600 yuan/ton. Domestic potassium sulfate will have a stronger price competitiveness in the world. The start-up rate of processed potassium sulfate may be increased, and the price of domestic potassium chloride will rise. Thus, the export volume of potassium fertilizer will continue to grow.

According to Chinese Customs data, from January to November 2018, China exported 22.76 million tons of fertilizers, 25.48 million tons of fertilizers in 2017 and 28.09 million tons of fertilizers in 2016, a decrease of 21.5% compared with 2015. In recent years, the total export volume of chemical fertilizer has been declining year by year. The export volume of compound fertilizer is affected by the supply and demand of the international fertilizer market. Consumers pay more attention to the brand while paying attention to the price. Therefore, the export volume of compound fertilizer still needs time to test. Although zero export tariff has improved the market competitiveness of chemical fertilizer export to a certain extent, it is difficult to substantially increase the export volume in the short term. At present, there is still a big gap in the fertilizer market in Africa, Southeast Asia and the countries along the belt. With the promotion of the zero tariff policy, the output of potash fertilizer will increase significantly in 2019, and the export of chemical fertilizer will also be completely weakened.

Forecast 7: Southeast Asian market will become a new blue sea for domestic fertilizer enterprises

Predictive Reason: The demand for fertilizer in Southeast Asian countries is increasing. Our country’s top growers have gone abroad to develop planting industry in Southeast Asia. With the advantage of export price brought by zero tariff, Southeast Asian market will undoubtedly become a new blue sea for domestic fertilizer enterprises to compete. More than ten enterprises, such as Kim Jong-tak, Ladome and Ruifeng, have begun to lay out the Southeast Asian market, and many well-known fertilizer enterprises have put the development of Southeast Asian market on the agenda.

A large number of domestic planting experts went to Southeast Asia to develop planting, which led to the growth of demand for domestic fertilizer in foreign planting industry. India, Malaysia, the Philippines, Thailand, Vietnam and other countries are increasingly demanding fertilizers. Take Thailand as an example, there is about 6 million tons of fertilizer demand per year; Vietnam needs to import 1.5 million to 1.8 million tons of urea, 700,000 tons of diammonium phosphate and 200,000 tons of compound fertilizer per year; and the potential demand of fertilizer in the Philippines is nearly 4.7 million tons.

Although most of the countries in Southeast Asia are agricultural countries, their fertilizer industry starts late and their production enterprises lack technology. Under the influence of the “one belt and one road” national strategy and the establishment of the China ASEAN Free Trade Area, China’s fertilizer products have an advantage over Southeast Asia. At present, there are more and more Chinese fertilizer products in the whole Southeast Asian market. China’s export to the Philippines increased slightly from January to July, and the export of fertilizer to Vietnam more than doubled from January to September. The release of zero tariff on chemical fertilizer export will further benefit domestic fertilizer enterprises to go abroad.

At present, more than ten domestic enterprises are stepping up their efforts to enter the Southeast Asian market. For example, Ladome’s construction of an annual production base of 600,000 tons of eco-green compound fertilizer in Zhanjiang is a major initiative to open up the fertilizer market in Southeast Asia; Ruifeng Ecology has already entered the fertilizer market in Malaysia and Thailand, and has cooperated with the Ministry of Agriculture of Vietnam to introduce new high-end functional fertilizers and agrochemical services to Vietnam; Kim Jong-Dae has established new high-end functional fertilizers and agrochemical services in Vietnam Branches in India, Thailand and Malaysia are also being laid out.

Prediction 8: Traditional single e-commerce platform gradually transforms into integrated service providers

Predictive Reason: The continuous increase of professional farmers has created a huge agricultural technology service market. The traditional single e-commerce which only provides agricultural commodity sales will increasingly fail to meet the needs of growers. The only way for traditional agricultural e-commerce to survive in 2019 is to take a step from “products” to “technical services”.

The data show that at present, there are over 4 million large farmers with cultivation area over 50 mu, 30 million medium-sized farmers with cultivation area of 10-50 mu, and about 2 million cooperatives and large farm bases. It can be said that professional farmers have become the main force of cultivation in China. Unlike the traditional small-scale peasant economy, these large farmers have not only stayed in the demand for agricultural assets, but also tend to diversify and integrate the demand for agricultural technology services. The traditional single e-commerce, which only provides agricultural commodities for sale, can no longer meet the needs of farmers. The data show that China’s agricultural technology service market has reached a scale of 100 billion, but also continues to grow, and this market trend will inevitably promote the transformation of traditional agricultural e-commerce platform with online purchase and sale of agricultural assets as a single business to integrated service-oriented e-commerce.

At first, the emergence of agricultural e-commerce is more to cater to the needs of the upgrading of agricultural assets industry channels. Now, agricultural e-commerce is more from the upgrading of channels to the double upgrading of products and services. For example, the traditional e-commerce based on single-product business is like opening a pharmacy. Farmers need to prescribe whatever medicine they need. What they need now is a doctor in the field. Farmers need you to come to visit them, diagnose all kinds of problems in planting, and prescribe them. After the prescription has been approved by farmers, they can provide a complete set of products and services for farmers. People are demanding more and more services.

Taking the successful harvest transformation as an example, starting in 2015, we will gradually expand the field of agricultural technology services, establish a series of online and offline agro-technology service sections for different regions and different crop needs, and carry out agricultural technology activities in the countryside. The slogan of “product package, package service and service standardization” was put forward, and the platform positioning of “being the planting housekeeper around farmers” was put forward.

In addition to service-oriented e-commerce, the model of agricultural e-commerce providing paid agricultural knowledge services has also emerged. The Agricultural Knowledge Payment Platform “Learning from Agriculture Everyday” has completed three rounds of financing in less than a year, providing agricultural knowledge services covering crop knowledge, agrotechnical extension, brand building, product marketing and agro-creation knowledge.

In addition to the existing pre-production and mid-production stages of agricultural e-commerce service mode, the joint financial unit will provide supply chain financial services for distributors, growers, etc. The use of precision agricultural technology to provide agricultural informationization, O2 O website services, as well as to provide farmers with planting industry solution planning and other aspects of service mode will also become the transformation of agricultural e-commerce to integrated service e-commerce. Direction and tuyere. In a word, agricultural comprehensive service-oriented e-commerce has become the mainstream trend of agricultural e-commerce. In 2019, agricultural e-commerce must constantly deepen the transformation and innovation of agricultural technology services.

Prediction 9: Traditional agricultural retail stores are further squeezed by the proportion of direct sales of manufacturers is getting higher and higher

Predictive Reasons: Big farmers sprang up like bamboo shoots after a rainstorm. Operational pressure will prompt manufacturers to directly inoculate big farmers. Pressure of planting cost will also prompt big farmers to skip the circulation link and seek opportunities to cooperate with manufacturers. Channel providers are either transformed into technology export and service-oriented companies, or they will face the risk of elimination.

In recent years, the national land transfer market has shown a leap-forward growth, and the proportion of large farmers in the flow of agricultural market has become increasingly large. According to the data from the Land Transfer Market Report published by the Land Transfer Network in April 2018, about 55% of the rural collective land transferred in the past three years has been transferred to large farmers of agricultural cultivation and breeding, 32% to agricultural cooperatives and enterprises, and 13% of the land management rights have been obtained by other operators.

With the rising price of upstream means of production, the pressure of rising prices of agricultural products will encourage large agricultural households and cooperatives to skip the traditional distribution link of agricultural retailers and directly seek direct marketing from agricultural producers to purchase agricultural assets. Increasingly pressing demand for products and services has also spawned a number of manufacturers and platforms specially serving large farmers throughout the country. Agricultural staging is one of them.

Through strategic cooperation with famous fertilizer manufacturers such as Jin Zhengda, Sirte and Hongsifang in Anhui Province, Agricultural Phase-by-Phase provides advance selling services for large-scale farmers, brings into play the advantages of reducing costs and improving benefits brought about by large-scale production of means of production orders, and reduces the traditional agricultural purchase and marketing mode’s economic benefits to farmers in terms of price, quality, logistics, warehousing, capital and so on. Campaign pressure and risk.

In addition, various forms of agricultural input ordering meetings have been held in succession throughout the country. Through direct docking and negotiation between new agricultural operators, mainly planters and cooperatives, and agricultural input manufacturers, individualized customization and direct supply and direct marketing of their products and services have been realized. This kind of ordering will be welcomed by many new agricultural operators and well-known agricultural producers. Welcome. Taking the Heilongjiang New Type Agricultural Operating Agents Agricultural Input Exposition held in October last year as an example, the order meeting attracted more than 2,000 new type agricultural operators from all over the country to participate in the conference, with the intention of signing contracts or exceeding 400 million yuan.

In the agricultural market in 2019, the operating profit and market share of traditional agricultural retailers will be further squeezed, and the proportion of direct sales of manufacturers will be higher and higher. The deepening implementation of the Pesticide Management Regulations will also make more and more family-style (husband and wife-type) agricultural retailers face closure. The transformation of traditional agricultural retailers will become the major trend and mainstream proposition of the times. Under such circumstances, are you still selling on credit?

Prediction 10: Microbial fertilizers will be the hot category in 2019

Forecast reason: In 2018, the number of registration certificates for microbial fertilizers increased by 3508, and it is expected to exceed 10,000 in 2019, showing blowout growth. By the end of October last year, China had 2,050 microbial fertilizer enterprises with a capacity of 30 million tons, accounting for 70% of the annual output of new fertilizers and a output value of 40 billion yuan. The market competition situation of microbial fertilizer will be white-hot, and microbial fertilizer products will become the hottest explosive products in the fertilizer market in 2019.

Compared with traditional fertilizers, microbial fertilizers have advantages in protecting ecology, utilizing agricultural waste resources, maintaining soil health, improving fertilizer utilization efficiency and quality of agricultural products. The data show that the number of registration certificates for microbial fertilizers (including bio-organic fertilizers, microbial agents and compound microbial fertilizers) increased from 5 685 in 2017 to 3 308 to 9 193 in 2018. Microbial fertilizer has become the most productive and widely used variety of new fertilizers in China.

On the other hand, the long-term unreasonable use of chemical fertilizers has led to a series of soil degradation problems. According to the Blue Book of Cities: China’s Urban Development Report NO.11 published in September last year, soil pollution in some areas of China is serious. The contaminated area of cultivated land soil reaches 15,000 mu, and the rate of over-standard points reaches 19.4%. The use of chemical fertilizers and pesticides in China is at a high level in the world. Serious soil pollution problems cause great hidden dangers to food safety, land security and ecological security. The implementation of the Law of the People’s Republic of China on the Prevention and Control of Soil Pollution is bound to have a far-reaching impact on the prevention and control of soil pollution and soil remediation in China.

Soil ecological repair has a long way to go. Taking the initiative of the national “one belt and one way” initiative and revitalizing the rural strategy, in 2018, the southern rural newspaper joined the well-known agro chemical enterprises at home and abroad, and launched the “sailing around the road to revitalize thousand villages, 2018 China’s soil ecological restoration and agricultural technology promotion”, which trained 20 thousand farmers and reached 500 thousand people online. In 2019, the campaign will continue to reach 20 crop-producing areas in 11 provinces and municipalities.

The huge demand for pollution control means huge market space. Some industry authorities have said that China needs to develop and use bio-fertilizers more than any other country, and the application of microbial fertilizers in soil will be an important development direction of soil ecological remediation. With the introduction of environmental protection high-pressure policy and the further expansion of soil remediation market, more capital will be invested in the field of microbial fertilizer.

According to Dow Jones, Wood McKenzie said India’s oil demand increased by about 250,000 barrels a day last year, a situation that will repeat in 2019. According to the consulting firm’s forecast, if so, India’s oil demand will grow faster than China’s.

In 2018, India accounted for 14% of the increase in global oil demand. Transport fuels are the biggest factor contributing to the rise in oil use in India in the context of strong sales of commercial vehicles, as is the simplified sales tax structure in the country. In the upcoming national elections, the campaign will help boost demand this year.