Petrochemical industry has a blueprint for the second half of the year

Recently, the China Petroleum and Chemical Industry Federation held the "2020 National Petroleum and Chemical Industry Economic Situation Analysis Meeting" in a live webcast.

Li Shousheng, President of the China Petroleum and Chemical Industry Federation, said in his speech that the sudden outbreak of the new crown epidemic at the beginning of this year has ravaged the world and accelerated the process of the world without major changes in a century. The world’s political, military, and economic patterns will all undergo profound changes, directly impacting the end-demand market, downstream demand plummeting, companies suspending production, prices plummeting, and even the value of crude oil futures falling into a negative value, directly causing global economic damage. The recession has brought unprecedented impact to China's petrochemical industry.

Under the strong leadership of the Party Central Committee with Comrade Xi Jinping as the core, the whole industry has worked together to make solid progress in the resumption of work and production of enterprises, continuous improvement in consumer demand, and increasing positive factors. Judging from the economic performance of the industry in the first half of the year, the demand gap caused by the new crown epidemic is gradually being repaired, and the economic performance indicators of the petroleum and chemical industries have improved in an all-round way, fully demonstrating the firm belief and powerful force of the petrochemical industry and enterprises to actively face challenges.

Fu Xiangsheng, Vice President of China Petroleum and Chemical Industry Federation, introduced the operating status and characteristics of the petrochemical industry in the first half of the year. In the first half of the year, the industry achieved operating income of 5.07 trillion yuan, a year-on-year decrease of 11.9%, total profits of 141.6 billion yuan, a year-on-year decrease of 58.8%, and total imports and exports of US$305.47 billion, a year-on-year decrease of 14.8%.

　　
It mainly reflects three characteristics:

One is the continued growth of oil and gas production and consumption, indicating that the market's demand for energy and raw materials is gradually recovering.

Second, the profit decline is narrowing. In the first half of the year, the industry's total profit fell by 58.8% year-on-year, which was 14.2 percentage points lower than the previous five months. Overall, the benefits of the entire industry are improving. Looking at the oil and gas and oil refining sectors by sectors, it is more difficult. The downstream chemical industry is better than the upstream.

Third, the operating income of the chemical sector was slightly better. In the first half of the year, the operating income of the oil and gas sector was 418.69 billion yuan, a year-on-year decrease of 17.8%, the refining sector was 1.61 trillion yuan, a year-on-year decrease of 13.1%, and the chemical sector was 2.93 trillion yuan, a year-on-year decrease of 10.5%. better.

The "14th Five-Year Plan" period will be a critical period for the high-quality development of my country's economy, especially China's petroleum and chemical industries. In these crucial five years, what kind of blueprint does the petrochemical industry have?

President Li Shousheng said that in the second half of the year, China’s macro economy will remain the same as the “four changes”-the fundamentals of China’s long-term economic development remain unchanged, and the basic characteristics of good economic resilience, sufficient potential, and large room for maneuver remain unchanged. The good supporting foundation and conditions for sustained economic growth have not changed, and the momentum of economic structural adjustment and optimization has not changed. In the post-epidemic period when the international economic situation is complex and changeable, my country's petroleum and chemical industries must do their best to focus on the key tasks in the second half of the year on the basis of a comprehensive summary and analysis of the economic operation in the first half of the year.

The first is to adjust the structure and foster new opportunities. How to solve the contradiction between the overcapacity, low added value of bulk products in the petrochemical industry and the shortage of high-end differentiated products in the industry requires the industry to continue to strengthen its technological innovation capabilities. Under the goal of doing something and not doing something, we will continue to achieve new breakthroughs in key areas and high-quality technologies. From the stage of follow-up and parallel running to a new stage of leading the way, the market demand side is the leader in product research and development, to increase product differentiation and high-end, and use product differentiation to solve the contradiction of overcapacity and product homogeneity.

The second is to strengthen enterprises and focus on industrial parks. Stimulating corporate vitality is the core link of the entire macro economy and the high-quality development of our industry. At present, world-class petrochemical multinational companies have all come to China, and accelerating the cultivation of world-class petrochemical companies is an urgent and arduous task facing the entire industry. In the process of transformation and upgrading of the global petroleum and chemical industry, developed countries in the world and the world’s chemical powers have vigorously promoted the development of chemical parks in the adjustment of industrial structure and the cultivation of competitive advantages, and accelerated the integration of upstream and downstream adjustments. A batch of world-class chemical parks. The chemical park is becoming a strategic focus and work highlight for the strategic transformation and upgrading and high-quality development of my country's petroleum and chemical industries.

The third is to focus on management and reduce costs. How to reduce business costs and solve the dilemma of declining benefits under the circumstances of very difficult macroeconomic conditions is an arduous task that the entire industry must face directly. We must take high-quality development as the goal, focus on capital and cost management, and on the basis of fully benchmarking world-class companies, strengthen capital cost management strictly, meticulously and practically, especially focusing on the center of reducing costs and increasing efficiency. In the link, firmly grasp the three aspects of cost composition of materials and labor costs (materials are raw material costs, labor is labor costs, and expenses are financial expenses). Be careful and save every bit. We will crack down on the shortcomings and difficulties of economic benefits in terms of becoming bigger and stronger and doing a good job of stability.

The fourth is to ensure safety and emphasize environmental protection. Security has two meanings. The first is safe production, which is an important link that the petrochemical industry must constantly focus on, and the other is to ensure energy security. During the "Thirteenth Five-Year Plan" period, my country has become the world's largest oil importer. In 2019, my country's dependence on foreign oil and natural gas reached 73.4% and 41% respectively. We must increase investment in exploration and development, improve oil and gas security and safe production, vigorously promote the development and application of unconventional oil and gas, and promote effective replacement of resources. The entire industry must attach great importance to environmental protection work, which is related to the long-term development of the petrochemical industry. It is necessary to develop green chemical products, focus on promoting the construction of a green technology system, resolutely fight pollution prevention and control, blue sky and clear water defense, and strengthen technical support for environmental protection in the industry.