The probability of import dependence of chemical products is greatly reduced

The spread of social and public events, the global macroeconomic pressure, and the deep fall in oil prices due to the failure to reach a production cut agreement, the price of chemicals in the first quarter was in a downturn.

Refining and chemical project get together and put into production

Under the influence of the large-scale refining and chemical production, 2020 is a major year for the production capacity of domestic chemical products, especially petrochemical products. According to statistics, except for PVC and urea (the backward production capacity of the urea market is eliminated, the actual production capacity growth rate is less than 9.48%), the growth rate of the remaining production capacity is in double digits, and the production capacity growth rate of ethylene glycol, styrene, and PTA It is more than 30%. Facing the huge increase in production capacity, there are only four ways to achieve a balance between supply and demand: improvement in demand, decline in operating rates, reduction in imports, and increase in exports.

In recent years, the domestic economic growth has slowed down, and domestic demand growth has slowed down accordingly. Under the environment of outbreaks of social public events, it is a blessing that demand does not decline, and the market is simply unable to digest such a huge increase in production capacity. Therefore, the demand side is not the key to solving the oversupply of chemical products.

Except for urea, domestic exports of other chemical products are relatively small. In 2020, even if China's production capacity increases significantly, it will be difficult to become a major exporter of chemicals in a short period of time. First, in international trade, the supply of raw materials for enterprises usually has a stable channel, and many energy-based products will sign long-term agreements. Even if there is an export demand in the country, it is difficult for foreign companies to be imported into China in a short period of time due to trade habits. Chemicals. Secondly, China's crude oil self-sufficiency rate is less than 30%, which requires a large amount of imports. Due to freight costs and other issues, the cost is higher than other oil-producing countries. This can be seen from the inversion of domestic crude oil prices and North American crude oil prices. Especially in the context of low oil prices, the price advantage of domestic coal chemical industry disappears. Third, weak foreign demand, as explained above. It can be considered that the export of domestic chemical products is still sluggish. As for the export volume of urea, because the export destination is India, and India's urea production capacity has risen in the past two years, urea exports have not seen bright spots.

In terms of imports, the import dependence of PE, PP, styrene, and ethylene glycol is relatively high, with 47.61%, 19.41%, 27.40%, and 55.52%, respectively, in 2019. In 2020, as the production capacity of PE, PP, and ethylene glycol is concentrated, the domestic self-sufficiency rate will gradually increase, and the import dependency will decrease accordingly. However, whether the device can be successfully put into production needs to pay attention to the production profit and the profit comparison between the coal and oil processes, and many devices are planned to be put into operation in the fourth quarter, and it is difficult to release all the production capacity within the year, so the impact of increased production capacity on imports is not as obvious as the data reflects .