Oil prices plummet! Dachang stopped production! Another raw material plummeted by nearly 10,000 yuan!

International oil prices have dropped significantly. As of the close of the day, the main WTI crude oil futures contract closed at US$80.86/barrel, a decrease of 3.63%; the main contract of Brent crude oil futures closed at US$81.99/barrel, a decrease of 3.22%.

In the stock market, Exxon Mobil fell 1.37%, Chevron fell 0.7%, ConocoPhillips fell 0.42%, Schlumberger fell 0.69%, and Occidental Petroleum fell 1.48%.

The higher-than-expected increase in crude oil inventories is an important factor in the pressure on oil prices.

Last night, the US Energy Information Administration (EIA) released data showing that although US gasoline inventories fell to the lowest level since November 2017, crude oil inventories unexpectedly increased by 3.29 million barrels last week, and crude oil production was higher than expected for six consecutive weeks.

In addition, the OPEC+ Joint Ministerial Supervisory Committee meeting will be held at 21:00 Beijing time tonight, and the ministerial meeting will be held thereafter. Prior to this, President Biden spoke daily to OPEC+. According to Bloomberg News, on the eve of OPEC+ meeting on Thursday to discuss oil policy, Biden continued to pressure it to fight high oil prices and blamed its oil policy for inflationary pressures.

In addition to the increase in crude oil inventories, the news that Iran announced that the Iranian nuclear talks will be officially opened also plunged oil prices.

According to Xinhua News Agency, Iranian Deputy Foreign Minister Bagheri announced on the 3rd that the Iranian nuclear talks will resume on November 29 in Vienna, the capital of Austria.

The United States is currently suffering from expensive energy prices, and the resumption of Iran’s nuclear negotiations is likely to cause the United States to relax sanctions on Iran and lead to the return of Iran’s crude oil production. This expected warming also reduces the possibility of additional OPEC+ production increases.

But Bart Melek, head of commodity strategy at TD Securities, said that the answer is difficult to determine whether OPEC will increase production just because the United States is politically uneasy about gasoline prices.

Shell factory fire, production capacity of one million tons stopped

According to foreign media reports, the Singapore-based petrochemical producer Shell (Shell) had a fire in its cracking furnace in Pulau Bukom on November 1 due to technical problems. It is reported that the company has notified some ethylene and The supply of propylene buyers has decreased. Some market participants said that the cracking device is currently offline and will be maintained for a week.

According to statistics, the capacity of this cracker is 1 million tons/year of ethylene and 500,000 tons/year of propylene. In addition, the production of the cracking unit is mainly used in its derivative plants, including a 250,000 tons/year propylene oxide unit or 550,000 tons/year styrene unit, and a 70,000 tons/year restarted in May 2020. Isopropanol plant and 750,000 tons/year ethylene glycol plant.

The main downstream supply of ethylene includes the 350,000-ton/year vinyl acetate plant of Dalian Chemical in Taiwan, China and the metallocene hexene LLDPE plant of Singapore Prime Evolue on Jurong Island.

Its propylene production mainly supplies Changchun Chemical’s 194,000-ton/year cumene unit and Mitsui Phenol’s 151,000-ton/year cumene unit.

In addition, the complex here also has an 18.6 ton/year butadiene extraction unit, but its contractor has not yet received any notice of supply reduction.

In addition, PetroChina Shell’s first cracking unit in Guangdong has recently undergone maintenance. According to sources, this maintenance is temporarily unable to determine the exact date and duration of the closure. The ethylene production capacity of the cracker is 1 million tons/year, and the propylene production capacity is 535,000 tons/year.

Bisphenol A plummets nearly 10,000 yuan

"Golden Nine and Silver Ten" suffered a cold winter, and bisphenol A fell broadly for the second time in the year. Since September, bisphenol A has entered a downward channel. From tepid trading to hard to find real orders, the market fell within a narrow range to a sharp decline, and the two consecutive months of broad decline ended.

After the National Day, the crude oil surge during the holiday drove raw materials such as pure benzene to rise sharply. On the first trading day after the holiday, the raw material phenol/acetone rose sharply. Supported by the cost side, bisphenol A went up against the trend, and the focus of market discussions was 22,167 CNY/ton. It quickly rose to 24,200 CNY/ton. But the good times are not long, and the downstream is not able to follow the rise. With the new equipment put into production and the East China bidding continues to fall, the market has entered an unstoppable downward trend. So far, the domestic mainstream market offer has fallen to 20,200 CNY/ton. The factory has reported that The bid price was 20,200 CNY/ton, and the latest auction price on October 26 was 19,500 CNY/ton.

▶ ECH skyrocketed in September, eroding the decline in BPA and taking up cost space

In September, ECH skyrocketed. Affected by the "dual control", some devices dropped and stopped, the overall operating rate of the market declined, and the shortage of supply intensified. The "Double Festival" is approaching, and the downstream market still needs to stock up due to pre-orders, and the market quotation has risen sharply. As the price rises to a high level, the downstream just needs to passively follow up.

The soaring raw material ECH has led to a sharp increase in the cost of epoxy resin. Under the driving force of cost, epoxy resin has to report high, but bisphenol A has to adjust to make some cost space.

▶ Downstream PC operating load has dropped sharply, and the contradiction between supply and demand has intensified

Under the influence of "dual control", chemical companies are under pressure, and the production of epichlorohydrin and epoxy resin plants is also forced to reduce production. The reduction in operating rate will inevitably reduce the demand for raw materials, and the cost will be greatly increased. The follow-up speed is far less than the upside potential of raw materials, and the profit margin is under pressure. The factory's burden is more than just a small order purchase. The mind of the BPA holders is unstable and actively sells the goods. The related product ECH and downstream demand are doubled down. A accelerated its decline. In October, planned and unplanned shutdowns of PC devices continued, aggravating the negative atmosphere in the market, and demand is expected to shrink severely.

▶ Near the end of the month, the cost impact will accelerate the decline of the BPA market

In the fourth week of September, the raw material phenol and acetone market turned and fell, the cost support weakened, and the center of gravity continued to fall. Domestic factories concentrated on lowering the listing prices of phenol and acetone. Spared.

In October, the raw material end phenol ketone market entered a downward channel again. On the 27th, the acetone factory opened an order to be lowered by 200 CNY/ton, and the market followed the downward trend. So far, the East China market has offered acetone to 6,400 CNY/ton, and the East China phenol market has offered to 9600. Yuan / ton. Although BPA continues to fall, the profit margin is still considerable. From a cost perspective, BPA still has room for a downward trend.

At the end of October, the major domestic factories Nantong Xingchen and Changchun Chemical Plants completed their overhauls. A 120,000-ton/year bisphenol A plant in Tianjin Zhongsha was put into operation. Another new plant, the Pingmei Shenma 130,000-ton/year plant, was planned for trial operation in the near future. , The domestic supply is expected to increase in the future.

However, during the same period, the operating rate of the downstream epoxy resin market is unlikely to fluctuate due to cost pressures. The continued order-based purchases will continue to cause the operating rate of the PC-side industry to remain low. There is no plan to resume operations in the near future.

At present, it is difficult for both ends of supply and demand to be more favorable. From the industry perspective, after a round of rising and rising, the chemical industry index turned down. Buyers and sellers in the industry are cautious and wait-and-see sentiment has increased. Look, the bisphenol A market may continue to bottom in November.