Price Trend

According to the data monitored by business associations (average price of SG5 manufactured by calcium carbide method), domestic PVC quoted 6350 yuan/ton on Feb. 18 and domestic PVC quoted 6350 yuan/ton on Feb. 22, with little change in price, the fluctuation range is 50-100 yuan/ton, and the PVC market runs smoothly.

II. Cause Analysis

Product aspect: After the Spring Festival, the spot market atmosphere of PVC has gradually recovered, the market inventory has increased, the main demand is still recovering, the actual volume is not much, stable price operation. Recently, there has been little volatility in PVC futures, which has little impact on the spot market. Up to February 22, the domestic mainstream price range of PVC is 6150-6600 yuan/ton.

P > Industry: On February 22, the rubber and plastic index was 734 points, unchanged from yesterday, down 30.75% from the highest point of 1060 points in the cycle (2012-03-14), and up 27.43% from the lowest point of 576 points on December 21, 2015. (Note: Cycle refers to 2011-12-01 to date) This week, commodity market shocks slightly, the overall trend of rubber and plastic industry consolidation.

3. Future Market Forecast

Business analysts believe that after the Spring Festival, the PVC market is in a recovery period, stable operation, price consolidation. It is expected that the downstream demand side will gradually recover in the future, and the future market will oscillate. The mainstream price of PVC 5 is 6100-6650 yuan/ton.

In recent years, the domestic styrene industry has developed steadily. By the end of 2018, China’s annual production capacity reached about 9.5 million tons. In the next few years, styrene production capacity will continue to expand, downstream demand is insufficient to follow up, import volume will be significantly reduced, and the supply and demand pattern will appear larger variables.

Great increase in capacity

In 2018, a total of 760,000 tons/year styrene production capacity was added in Qingdao Bay and Haoyuan, Anhui Province. In the next few years, with the hot construction of integrated refining and chemical projects, Hengli Petrochemical, Zhejiang Refining and Chemical and other large-scale new styrene plants are planned to start up, together with the new projects of other enterprises, the total capacity of styrene plants planned to put into operation this year and next year alone has exceeded 5 million tons/year, and the domestic supply of styrene will increase substantially.

It is noteworthy that the propylene oxide/styrene (PO/SM) co-oxidation process has increased significantly in the planned new plant. Wanhua Chemistry and Tianjin Bohua Chemical Company have chosen co-oxidation process. Compared with the traditional ethylbenzene dehydrogenation method, the investment and operation cost of co-oxidation method are reduced.

Previously, the co-oxidation process has been in the hands of foreign companies, such as Leandberg Basel, Shell, Repsall and so on. On January 5 this year, Wanhua Chemical Co-oxidation of Ethylbenzene with its own intellectual property rights to produce propylene oxide with high efficiency and green technology has passed the appraisal of achievements organized by China Petroleum and Chemical Industry Federation, and will be applied to the company’s new PO/SM plant in the future, which will break the technological monopoly of foreign companies.

In the traditional ethylbenzene dehydrogenation process, the use of raw materials is also more variable. More and more companies began to choose dry gas as the source of ethylene raw material, in order to achieve high value-added comprehensive utilization of refinery dry gas and promote resource conservation.

Insufficient follow-up of demand

Although the production capacity of styrene will increase dramatically, the overall follow-up of demand is insufficient. Industry insiders analysis, in 2018 as the main downstream of styrene ABS, EPS and PS production capacity is less, in the next few years, the planned production capacity in these areas is far lower than the expansion rate of raw styrene, coupled with the pressure of Sino-US trade war on the export of end products, the overall downstream support for styrene is insufficient. Significant reduction in imports

In addition to capacity and demand, imports also have a greater impact on the supply and demand pattern of styrene. As we all know, styrene in China is heavily dependent on imports, while products originated in Korea, Taiwan and the United States account for half of the imported Styrene Market in China.

On June 22, 2018, the Ministry of Commerce issued a final ruling on imported styrene originating in Korea, Taiwan and the United States, levying anti-dumping duties from the next day. With the implementation of anti-dumping and the increase of domestic production capacity, the import volume of styrene will be significantly reduced, and domestic styrene will become the new darling of the market. This can be seen from last year’s customs data. According to statistics, from July to November 2018, China imported 124.32 million tons of styrene, a decrease of 11.3% compared with the same period last year.

Generally speaking, with the successive start-up of integrated refining and chemical projects, the domestic production capacity is expected to expand substantially with the supporting styrene plant. At the same time, the anti-dumping policies on products from Korea, the United States and other regions have rapidly increased the proportion of domestic styrene in the market, and the supply pattern of styrene industry has changed greatly. In terms of the import volume of styrene from 3 million to 4 million tons per year in recent years, if the new production capacity can be released in the next two years, domestic styrene products may completely replace imported products.

Thanks to production growth and other factors, Total, an international oil and gas giant, achieved a good performance last year.

Recently, Daudal released its fourth quarter and full-year report of 2018, with adjusted net profit of $13.6 billion in 2018, an increase of 28% over the previous year, and a return on equity of nearly 12%.

In the first quarter of 2018, Total achieved a net profit of $2.9 billion, up 13% from a year earlier; in the second quarter, it achieved a net profit of $3.72 billion, nearly doubling from a year earlier; in the third quarter, it achieved a six-year maximum single-quarter profit of $4 billion, up 48% from a year earlier; in the fourth quarter, it achieved a net profit of $3.164 billion, up 10% from a year earlier.

Patrick Pouyannlei, chairman of the company, said that the company’s strong performance was mainly driven by production growth. In 2018, the company’s oil and gas production reached a record 2.8 million barrels of oil equivalent per day, an increase of more than 8% year on year.

In 2018, the net profit of the exploration and production sector of Daudal increased significantly, reaching 10.21 billion US dollars, up 71% year-on-year; the natural gas and renewable power sector increased 56% year-on-year, reaching 756 million US dollars.

Net profit of refinery and chemical industry, marketing and service sectors declined. Among them, the net profit of refinery and chemical sectors was $3.379 billion, down 11% from the same period last year; the net profit of marketing and service sectors was $1.652 billion, down 1% from the same period last year.

In 2018, Daudal made progress in the Ichthys LNG project in Australia, Yamal LNG project in Russia, Kaombo North project in Angola and Egina deep-sea oil field project in Nigeria. In addition to the counter-cyclical acquisition of Maersk Oil, it also acquired new offshore oil rights in the United Arab Emirates.

Mr. Pan said that Dodall had completed its stock repurchase plan of $1.5 billion in 2018, and that its mid-term dividend would be increased by 3.1% to 0.66 per share in 2019. Under the environment of oil price of $6 billion per barrel, it would continue to buy back $1.5 billion of shares.

In 2018, Total’s net investment amounted to 15.6 billion US dollars, and its cost reduction was about 4.2 billion US dollars. By the end of 2018, its asset-liability ratio was 15.5%.

The international crude oil market remained volatile last year, but oil prices rose from an average of $54 per barrel in 2017 to $71 per barrel, an increase of 41.48%.

Thanks to the rise in oil prices, several major international oil giants achieved profit growth in 2018.

Among them, BP’s net profit increased 177 times year-on-year to $9.383 billion, Shell’s reached $21.4 billion, up 36% year-on-year, and Exxon Mobil’s net profit was $20.89 billion, up about 6% year-on-year.

Total, FINA and ELF are global integrated energy producers and suppliers, headquartered in Paris, France. They are the largest oil and gas producers in Africa and the Middle East, ranking fourth in Europe, Southeast Asia and Latin America.

At present, Daudal has 28 refineries, 13 of which are wholly owned, and operates lubricating oil operations in more than 110 countries.

The crude oil market may soon usher in a new development, while Africa and South Africa will become new winners of energy wealth.

Dodar recently announced that it had made a major condensate discovery off the coast of South Africa.

The company said it had discovered a condensate field 175 kilometers offshore from the southern coast of South Africa, located in the Brulpadda prospect area, in Block 11B/12B of the Outeniqua Basin. The oil and gas bearing layer is 57 meters thick, stratigraphic age is Early Cretaceous, and drilling depth is 3633 meters. The following three-dimensional seismic exploration will be carried out by Dodar, followed by four exploration wells. According to Dodar, the exploration well has a resource of about 1 billion barrels of oil equivalent.

With 45% interest, Dodall is the operator of 11B/12B, covering an area of 19,000 square kilometers. Other partners include Qatar Petroleum, a 25% shareholder, CNR International, a 20% shareholder, and Main Street, a 10% South African consortium.

“With this discovery, Doddle has opened up a new world-class gas and oil business and has the ability to test several follow-up prospects in the same block,” Kevin McClarkland, senior vice president of exploration at Doddle, said in a statement.

Andrew Latham, vice president of Wood Mackenzie, an energy consulting firm, commented that although the well was not a crude oil discovery, Brulpadda would eventually bring about a billion barrels of equivalent, which would surely bring huge changes to South Africa. The crude oil market may find a turnaround.

In response to Dodar’s statement, South African Mining Minister Mantash welcomed this, believing that the oil and gas discovery will promote economic development.

Akif Chaudhry, chief analyst at Wood Mackenzie, said that while this would help South Africa’s gas economy, long-term planning was still critical.

At present, South Africa is drafting a new bill on the development of crude oil and natural gas resources. Several major oil companies have already deployed large-scale offshore areas in Africa. BP, Mobil and Shell are also on the list. Among them, Mobil’s main deep-ploughing areas are western and southern Africa, including Ghana, Mauritania and Namibia and other countries.

According to Dow Jones Sao Paulo, Brazil’s oil production in December 2018 was higher than that in November because of an increase in production from the country’s huge subsalt oil fields.

Brazilian oil production rose to 2.7 million barrels a day in December, 4.8% more than in November and 3% more than in December 2017, the Brazilian National Petroleum Administration (ANP) said Monday. Natural gas production reached 114 million cubic meters per day in December, an increase of 1.2% over November and 0.3% over December 2017.

According to ANP, production from subsalt oilfields in December increased by 3.9% over November to 1.9 million barrels of oil equivalent per day, with oil production reaching 1.5 million barrels per day and natural gas production reaching 61.5 million cubic meters per day. In December, oil and gas production from subsalt oilfields accounted for 55.4% of Brazil’s total oil and gas production, compared with 50.7% in December 2017.