In the First Half of the Year, the Operation of China's Petrochemical Industry was Remarkable, and in the Second Half of the Year, It Faced New Challenges

In the first half of the year, China's petrochemical industry stabilized and achieved results that far exceeded expectations at the beginning of the year. Among them, the petrochemical industry's operating income increased by 20.9% year-on-year, total profit increased by 24% year-on-year, and total import and export volume increased by 28.6% year-on-year. Consolidating the foundation of "stability" is the most urgent task for the economic operation of the current industry. In the second half of the year, the petrochemical industry will face enormous pressure for steady growth, and at the same time, there will also be a series of major opportunities.

On August 10, at the 2022 National Petroleum and Chemical Industry Economic Situation Analysis Conference held in Dalian, Liaoning Province, Fu Xiangsheng, Vice President of China Petroleum and Chemical Industry Federation (hereinafter referred to as Petrochemical Federation), released the report on the economic operation of the petrochemical industry in the first half of the year (referred to as the report). ) pointed out that in the first half of the year, the enterprises above designated size in the petrochemical industry (referred to as "regulatory") achieved operating income of 8.13 trillion yuan, a year-on-year increase of 20.9%, and achieved a total profit of 752.12 billion yuan, a year-on-year increase of 24%; the industry's total import and export volume was 515.72 billion USD, an increase of 28.6% year-on-year.


In the first half of the year, the operation of China's petrochemical industry is remarkable

In the face of the new situation and new characteristics such as the continued high prices of energy and resource products and the frequent spread of the epidemic, which brings more uncertainty to the security of the industrial chain and supply chain, my country's petrochemical industry stabilized in the first half of the year and achieved results that were much higher than expected at the beginning of the year. Among them, the operating income of the petrochemical industry increased by 20.9% year-on-year, the total profit increased by 24% year-on-year, and the total import and export volume increased by 28.6% year-on-year.

Production of major petrochemicals continued to grow. In the first half of the year, the national crude oil production increased by 4%, natural gas production increased by 4.9%, refined oil production increased by 1.7% (including gasoline increased by 0.2%, diesel increased by 15.6%), naphtha production increased by 11.5%, ethylene production increased by 1.4%, pure Benzene output increased by 13.7%, methanol output increased by 0.9%, synthetic resin output increased by 1% (including polyethylene increased by 9.9%, polystyrene increased by 5.7%, ABS resin increased by 3.1%), and total fertilizer output increased by 3.3%. The steady growth of crude oil, natural gas, and fertilizer production has made important contributions to ensuring my country's energy security and increasing summer grain production.

The status of the petrochemical industry as an important pillar industry of the national economy is increasingly prominent. In the first half of this year, the operating income of the petrochemical industry was 8.13 trillion yuan, accounting for 12.4% of the national total industrial income, an increase of 1 percentage point over the same period last year; the total profit was 7521.2 trillion yuan, accounting for 17.6% of the national total industrial profit In the same period last year, it increased by 3.1 percentage points; the total import and export volume was 515.72 billion US dollars, accounting for 16.7% of the national total import and export value, an increase of 2.3 percentage points over the same period last year.

In the first half of this year, compared with the same period last year, the number of regulated enterprises increased even more. As of the end of June, the number of regulated enterprises in the petrochemical industry reached 28,500, an increase of 1,823 compared with the same period last year. Fu Xiangsheng said that the high-quality development of the petrochemical industry and the scale, large-scale and agglomeration of devices have been further improved.

From the perspective of the internal segmented business of the petrochemical industry, the benefits and proportions of the three major sectors of oil and gas, refining and chemical are changing. Analyzing the logic behind the data, Fu Xiangsheng believes that extending the industrial chain and developing the product structure towards refinement, high-end and functional development is the right choice for transformation and upgrading.


The operation of the petrochemical industry faces new challenges in the second half of the year

The report analyzes that this year, the new crown epidemic is still in constant mutation around the world, and the risk of virus transmission is further increasing. Coupled with the intensification of geopolitical conflicts and the all-out Western sanctions, the global political economy is undergoing a new situation of great confrontation, great division, and great reconstruction. Now the global economy is in the midst of a variety of contradictions intertwined, a variety of difficulties superimposed, and a variety of The severe situation of continued downward pressure.

On July 26, the International Monetary Fund (IMF) lowered its forecast for world economic growth this year and next to 3.2% and 2.9%. The report predicts that the world economic growth rate will slow from 6.1% last year to 3.2% this year, 0.4 percentage points lower than the April forecast; the world economic growth rate in 2023 is expected to be 2.9%, 0.7 percentage points lower than the April forecast.

In addition, the World Bank, European Central Bank, Federal Reserve, Goldman Sachs, etc. have all expressed concern about the global economy this year.

An analysis by the Petrochemical Federation shows that since late February, global crude oil, natural gas, coal and other bulk raw material prices have been running at high levels. In the first half of the year, the average price of Brent crude oil was US$107.6/barrel, a year-on-year increase of 66%, and it has been fluctuating below US$100/barrel recently; fluctuations in oil prices directly affect the price fluctuations of other bulk raw materials, basic chemicals and grains. Prices of crude oil and its main petrochemicals have started to fall since May, and the price drop was more pronounced in June. It is expected that the pressure of price fluctuations of crude oil and major petrochemical products will increase in the second half of the year.

From January to June, the total import and export volume of the petrochemical industry increased by 28.6% year-on-year, but the impact of the global economic downturn on the foreign trade of the petrochemical industry in the second half of the year should not be underestimated. The Petrochemical Federation believes that in the second half of the year, it is still an arduous task to promote the stability and quality of foreign trade.


Identify and seize opportunities for steady growth

Li Shousheng, president of the Petrochemical Federation, said that consolidating the foundation of "stability" is the most urgent task for the current economic operation of the industry. In the second half of the year, the steady growth will face enormous pressure, and at the same time, there will also be major opportunities.

First, global energy and fertilizer shortages provide market opportunities for the development of the petrochemical industry. Russia is a major supplier of natural gas and hard coal to Europe. After the outbreak of the geopolitical conflict, it is expected that Europe will not only face a serious shortage of natural gas this winter, but also a shortage of about 7 million tons of coal supply. At the same time, Russia and Ukraine are big exporters of fertilizers, especially Russia. At present, the annual output of Russian fertilizers exceeds 50 million tons, making it the second largest exporter of fertilizers in the world. The export volume of potash fertilizers accounts for 20% of the global total. The current global fertilizer supply is also under strain. Li Shousheng suggested that in the face of this market shortage, my country's petrochemical enterprises can take advantage of production capacity, make policy adjustments, do some good things in the supply of energy and fertilizers, and do some great things for win-win cooperation.

Second, seize the major supporting opportunities for automobiles, electronic information, major equipment and new infrastructure projects that are strongly supported by domestic macroeconomic policies. According to the statistics of the major investment projects in the industry this year by the Petrochemical Federation, more than 380 major petroleum and chemical projects have been under construction, including key technical equipment for deepwater oil and gas development, shale gas deep wells in complex blocks, and fast drilling. In this batch of major infrastructure supporting projects, more high-end, differentiated, original technology projects that “support others and develop ourselves” can be created, showing that technological innovation is optimizing the industrial structure. important role in this regard.

In addition, there are many opportunities in the domestic market consumption upgrade to cultivate new consumption growth points, corporate mergers and reorganizations, and the cultivation of new advantages in market competition for "impressing customers" services.

Li Shousheng pointed out that only when the entire petrochemical industry achieves stability and progress can it create a new situation facing the future. "We are not only full of confidence in 'steady', but also full of passion for 'jin'."