Petrochemical industry ushers in new opportunities

On December 4, the 2020 national coal trade fair was held in Rizhao, Shandong Province. Zhu Fang, director of information and marketing department of China Petroleum and Chemical Industry Federation, attended the meeting and delivered a speech. Zhu Fang said that the new energy of domestic consumption should be concentrated on high value-added products, but the quality stability of high value-added products is not enough. Efforts should be made on quality, coal chemical industry should have a breakthrough in quality, and the product structure in the direction should be extended to the high-end of the industrial chain. Looking forward to the future, China will transform from a world factory to a world market, and the downstream consumer market will have great potential. The problem facing the petrochemical industry is the problem of growth. So where are the new growth points in the future?

Zhu Fang, the new trend of global energy and chemical development, believes that when we face primary energy consumption, we need to take a comprehensive consideration. For example, the rise of oil price will definitely affect coal, China's oil dependence is higher than 70%, and the change of oil price will certainly affect coal price. First of all, it is a node for the United States to change from a crude oil importing country to an exporting country. Shale gas and shale oil in the United States have a great impact on the oil market, and become the key point for the United States to control the global oil price. Global oil production is shifting to the West. Second, globally, the consumption of crude oil and coal is declining. The consumption of natural gas is rising. Third, diversification and lightweight are the future trend. Asia is the focus of energy consumption. The Asian premium of Asian crude oil shows the gap between supply and demand, which is an opportunity. Fourthly, China's coal chemical industry can produce a large number of chemicals from coal that originally needed oil to produce. New coal chemical industry has been suppressed by environmental protection, and the recent international situation has given coal chemical industry new opportunities. Fifth, the consumption of new energy vehicles will also bring changes to primary energy consumption. Second, new opportunities brought by economic and trade frictions Zhu Fang believes that there will be new opportunities for industries in economic and trade frictions. In 18 years, the trade in the field of Sino US petrochemical industry will increase by 17% year on year, while in 19 years, the trade in Sino US petrochemical industry will decrease by 29.7%.

For the United States, China has fallen to the third largest trading partner of the United States. From the perspective of import and export volume of petrochemical products, China's import and export volume of petrochemical trade is basically the same as that of the United States, indicating that there is still a demand gap at home, and this part of external demand is an alternative opportunity. After analyzing the import structure, we can find that the first thing missing is raw materials. Apart from basic raw materials, the biggest gap is very important electronic chemicals, such as high-end sulfuric acid and hydrofluoric acid. There is a gap in high-quality products. It is a new opportunity for the industry to make up the gap of high value-added imported products. The biggest opportunity is the rise of crude oil in a balanced and emerging alternative coal chemical industry. Third, the new driving force of the domestic consumer market for the domestic consumer market, Zhu Fang believes that the first is the growing demand, and private enterprises are fast in refining. Oil or energy problems are easy to get stuck. Energy, grain and high technology are three key points. The unstable situation in Iran and Venezuela may affect China's oil supply. Crude oil is likely to become the bottleneck restricting the development of China, while coal chemical industry is developing rapidly, the cost is reducing, and the products are expanding. This is an alternative to oil.

In this economic and trade friction, coal is a strategic product. In the future, China's chemical consumer market will still have new momentum. In the first half of the year, domestic energy consumption was very good, but still growing. And the growth rate of production is lower than that of consumption. In terms of the whole industry, the profit margin is declining. But sales are still rising. So this year, the demand is very strong, and the sales volume is still increasing. Zhu Fang said that the new momentum of the domestic consumer market has four aspects: first, the relocation of chemical enterprises into the park is the main driving force of this round of investment. Second, environmental protection and safety improvement of the enterprise is the focus of this round of investment. Third, the new coal chemical industry is the main focus of this round of investment growth. Fourth, from the perspective of investment quality, some investments tend to be large-scale and high-end. At the same time, the new energy of domestic consumption should work hard on quality, the stability of quality is not enough, the coal chemical industry should have a breakthrough in quality, the direction, and the product structure should be extended in the high segment of the industrial chain. Looking forward to the future, Zhu Fang said that China's transformation from a world factory to a world market has great potential in the downstream consumer market.