Economic Performance of China’s Petroleum and Chemical Industry for Q1-Q3
Source：CCR(China Chemical Reporter) 2013-12-26
1. Run Overview.
China Petroleum and Chemical Industry Federation (CPCIF) published the latest report, from January to September, the Petroleum and Chemical industry enterprises (with annual sales of RMB20 million or above), achieved an income of RMB9.59 trillion, a year-on-year increase of 9.0 %, combined profit was RMB606.32 billion, a growth of 12.5%; the fixed investment was about RMB1.45 trillion, increasing by 18.4 %. The players in the industry achieved a total amount of import and export of US$483.26 billion, an annual growth of 2%.
Petroleum, natural gas exploration and production sector: low income growth, the overall efficiency decline
From January to September, oil and gas extraction industry over 277 enterprises, achieved an income of RMB9760 billion, growing 2%; a total profit of RMB297.67 billion, but down about 5.1%; taxes paid RMB171.64 billion down by 5.6%. The fixed assets investment of RMB191.15 billion increased 26.1%. The first three quarters, the national crude oil production was 155 million tons, rising 1.8%; the natural gas production was 82.78 billion of cubic meters, a growth of 9.1 %.
The refining sector: steady income growth and efficiency continuously improving.
From January to September the crude oil processing over 1320 enterprises, achieved an income of RMB2.54 trillion, a year-on-year increase of 4.1%. The total profit was RMB24.28 billion, compared to the same period of last year there was a loss of RMB28.18 billion. With the fixed asset investment of RMB153.86 billion, there is an increasing of 22.1%. During the first three quarters, the volume of crude oil processed was 356 million tons, growing 4.2% over the same period of the previous year; oil production (gas, coal, diesel total) was 220 million tons, increasing 5.2%.
The specialized chemical equipment manufacturing sector: profits, revenue continue to grow at a rapid pace, the overall benefits keep a good posture.
From January to September, the scale of this sector more than 1 384 companies, achieved an income of RMB269.9 billion, an increase of 14.0%, total profit was RMB16.82 billion, an increase of 28.6%; investment in fixed assets was RMB76.69 billion, an increasing of 33.2%. During the first three quarters, the production of oil drilling equipment was 324 000 (set), growing 23.3% over the same period of the previous year; a dedicated device in refining was 1 598,000 tons, down by 2.7%.
The chemical sector: economic trends are generally stable, benefit maintains recovery situation.
From January to September, the chemical sector who has more than 25 315 companies, achieved an income of RMB5.81 trillion, a year-on-year increase of 12.3%, total profit was RMB267.54 billion, increasing 11.2%, fixed assets investment was RMB130 billion, increasing 15.6%; total imports and exports were US$245.25 billion, increased by 2.5%, of which export US$107.73 billion, an increase of 3.4%. The first three quarters, the ethylene yield was 11.79 million tons, growing 6.4%; caustic soda production was 21.058 million tons, increasing by 4.4%; and fertilizer production was 60.46 million tons, an increase of 6.1%; synthetic resin production 4 292 tons, increasing 10.3%; tire production 79 million pcs, a growth of 7.7%.
Petroleum, natural gas exploration and production sector: low income growth, the overall efficiency decline
From January to September, oil and gas extraction industry over 277 enterprises, achieved an income of RMB9760 billion, growing 2%; a total profit of RMB297.67 billion, but down about 5.1%; taxes paid RMB171.64 billion down by 5.6%. The fixed assets investment of RMB191.15 billion increased 26.1%. The first three quarters, the national crude oil production was 155 million tons, rising 1.8%; the natural gas production was 82.78 billion of cubic meters, a growth of 9.1 %.
The refining sector: steady income growth and efficiency continuously improving.
From January to September the crude oil processing over 1320 enterprises, achieved an income of RMB2.54 trillion, a year-on-year increase of 4.1%. The total profit was RMB24.28 billion, compared to the same period of last year there was a loss of RMB28.18 billion. With the fixed asset investment of RMB153.86 billion, there is an increasing of 22.1%. During the first three quarters, the volume of crude oil processed was 356 million tons, growing 4.2% over the same period of the previous year; oil production (gas, coal, diesel total) was 220 million tons, increasing 5.2%.
The specialized chemical equipment manufacturing sector: profits, revenue continue to grow at a rapid pace, the overall benefits keep a good posture.
From January to September, the scale of this sector more than 1 384 companies, achieved an income of RMB269.9 billion, an increase of 14.0%, total profit was RMB16.82 billion, an increase of 28.6%; investment in fixed assets was RMB76.69 billion, an increasing of 33.2%. During the first three quarters, the production of oil drilling equipment was 324 000 (set), growing 23.3% over the same period of the previous year; a dedicated device in refining was 1 598,000 tons, down by 2.7%.
The chemical sector: economic trends are generally stable, benefit maintains recovery situation.
From January to September, the chemical sector who has more than 25 315 companies, achieved an income of RMB5.81 trillion, a year-on-year increase of 12.3%, total profit was RMB267.54 billion, increasing 11.2%, fixed assets investment was RMB130 billion, increasing 15.6%; total imports and exports were US$245.25 billion, increased by 2.5%, of which export US$107.73 billion, an increase of 3.4%. The first three quarters, the ethylene yield was 11.79 million tons, growing 6.4%; caustic soda production was 21.058 million tons, increasing by 4.4%; and fertilizer production was 60.46 million tons, an increase of 6.1%; synthetic resin production 4 292 tons, increasing 10.3%; tire production 79 million pcs, a growth of 7.7%.
2. Run main characteristics.
First, economic stability, to be good, and the momentum increases.
The first three quarters, the domestic petroleum and chemical industry economic growth was stabilized and fast. Data shows that in the first quarter industry-wide in the added value increased more than 9.0%, and in the first half year of 9.1%. From January to September it increased by 9.4%. During the same time, the industry revenue increased from 9.0% in the first half to 9.3% in growth trend stable. The industry economic running smoothly, and the momentum is constantly increasing. A quarterly industry-wide profits up 10.6% in the first half to 9.6% from January to September to 12.5%, of which the Q3 growth rate of 18.2%. The three quarters, industry-wide loss of enterprises in the red lowered 22.3% year on year, and loss-making enterprises in the rate took up down from 21.3 % in the early 2013 to 15.4%. The chemical sector, the three quarter growth impetus came mainly from production of specialty chemical products, organic chemical raw materials and rubber products, such as the 3 pillar segments, and they were in the chemical industry of profit rate of contribution, respectively 41.6%, 32.7 % and 30.5 %.
Second, investment maintains steady and rapid growth, structural change significantly.
The first three quarters, the whole industry investment in fixed assets increased by 18.4% compared to the first half speed up nearly 2%. The chemical sector investment has slowed down. From January to September, oil and gas, refining and special equipment manufacturing industry investment increase, upped 26.1%, 22.1% and 33.2% in chemical sector growth rate was only 15.6% YoY, the first low on oil and natural gas production and refining sectors.
From the chemical sector, the organic raw materials, synthetic materials, and coatings (pigment) manufacturing and other fine chemicals investment grew rapidly. From January to September, the three sub-sector investment increased, respectively 30.1%, 23.4% and 26.8%, significantly higher than the industry average growth rate.
At the same time, some surplus sector investment kept a decline. For example, the first three quarters, the inorganic acid sector investment increased only 5.5%, and inorganic alkali was lower, 8.4%, phosphate segment investment fell more than 37%.
Third, prices bottoming out, the rapid pace of oil and gas industry rebound.
During the first half of the year, general price level in the petroleum and chemical industry continued to decline, until the first three quarters, petroleum and gas extraction and refining sectors began to rebound. However, the chemical sector prices will remain a large decline. Price Index, from January to September, the petroleum and chemical industry ex-factory price accumulated dropped 3.1%, lower 0.6 percentage points than the first half. By sectors, the price level in the oil, natural gas exploration and production sector lowered 3.4% annually, narrowed 1.8 percentage point from the first half; oil refining sector dropped 2.2%, compared with those in the first half 3.3%; chemical sector dropped 3.7%, compared with the first half narrow 0.2 percentage point; special equipment manufacturing sector declined 0.3 %, which is higher than the first half 0.4 percentage point. According to the analysis of the situation, the chemical market is still being picked up, and is also a more stable, but still weak.
Fourth, export growth, and the rubber products still dominate.
According to Customs statistics, from January to September, the industry's total exports were US$133.47 billion, an increase of 3.4%, compared with zero growth in the same period last year, accounting for 8.3% of the country's total exports.
Among export products, rubber products still dominate. The first three quarters exports by the rubber products amounted to US$35 billion, a year-on-year increase of 6.2% in total industry exports of 26.2%, increased 0.7 percentage points compared with the same period last year. In addition, in recent years oil exports maintained a relatively fast growth, in the first three quarter oil exported 12 464 million tons, accounting for oil production (gas, coal, diesel total) of 5.8%, growing 45.3% YoY. Exports valued at US$12.43 billion, an increase of 38.3%, accounting for 9.3% of the industry's total exports.
On the whole, China's petroleum and chemical product export structure is in a single, standard is low. From the current export situation analysis, the outbound markets demand, while improving, but are sluggish.
Fifth, rapid economic growth in the eastern region showed better economic efficiency.
In the eastern region, revenue growth remained ahead of the game. From January to September, 11 Eastern Provinces and cities of petrochemical industry obtained an income of RMB6.36 trillion, increasing 9.6%, taking up 66.3% of the National Industries income. 8 central provinces obtained an income of RMB1.66 trillion, increased by 7.9%, taking up more than 17.3%. 12 western provinces, municipalities received an income of RMB1.57 trillion, an increase of 7.5%, accounting for more than 16.4 %.
Profit growth is mainly from the eastern region. From January to September, the Eastern Region petrochemical players got a total profit of RMB346.82 billion, a year-on-year increase of 21.3%, accounting for 57.2% of industry-wide total profit. The central region got a total profit of RMB103.95 billion, and with more than 1.2% growth, accounting for more than 17.1%. The western region got a total profit of RMB155.54 billion, increasing 3.3% YoY over the same period of the previous year, of total more than 25.7%. The present circumstances have shown, in the eastern regional industrial restructuring and upgrading achieved positive results, and ability to withstand risks significantly stronger than the middle and western regions.
The first three quarters, the domestic petroleum and chemical industry economic growth was stabilized and fast. Data shows that in the first quarter industry-wide in the added value increased more than 9.0%, and in the first half year of 9.1%. From January to September it increased by 9.4%. During the same time, the industry revenue increased from 9.0% in the first half to 9.3% in growth trend stable. The industry economic running smoothly, and the momentum is constantly increasing. A quarterly industry-wide profits up 10.6% in the first half to 9.6% from January to September to 12.5%, of which the Q3 growth rate of 18.2%. The three quarters, industry-wide loss of enterprises in the red lowered 22.3% year on year, and loss-making enterprises in the rate took up down from 21.3 % in the early 2013 to 15.4%. The chemical sector, the three quarter growth impetus came mainly from production of specialty chemical products, organic chemical raw materials and rubber products, such as the 3 pillar segments, and they were in the chemical industry of profit rate of contribution, respectively 41.6%, 32.7 % and 30.5 %.
Second, investment maintains steady and rapid growth, structural change significantly.
The first three quarters, the whole industry investment in fixed assets increased by 18.4% compared to the first half speed up nearly 2%. The chemical sector investment has slowed down. From January to September, oil and gas, refining and special equipment manufacturing industry investment increase, upped 26.1%, 22.1% and 33.2% in chemical sector growth rate was only 15.6% YoY, the first low on oil and natural gas production and refining sectors.
From the chemical sector, the organic raw materials, synthetic materials, and coatings (pigment) manufacturing and other fine chemicals investment grew rapidly. From January to September, the three sub-sector investment increased, respectively 30.1%, 23.4% and 26.8%, significantly higher than the industry average growth rate.
At the same time, some surplus sector investment kept a decline. For example, the first three quarters, the inorganic acid sector investment increased only 5.5%, and inorganic alkali was lower, 8.4%, phosphate segment investment fell more than 37%.
Third, prices bottoming out, the rapid pace of oil and gas industry rebound.
During the first half of the year, general price level in the petroleum and chemical industry continued to decline, until the first three quarters, petroleum and gas extraction and refining sectors began to rebound. However, the chemical sector prices will remain a large decline. Price Index, from January to September, the petroleum and chemical industry ex-factory price accumulated dropped 3.1%, lower 0.6 percentage points than the first half. By sectors, the price level in the oil, natural gas exploration and production sector lowered 3.4% annually, narrowed 1.8 percentage point from the first half; oil refining sector dropped 2.2%, compared with those in the first half 3.3%; chemical sector dropped 3.7%, compared with the first half narrow 0.2 percentage point; special equipment manufacturing sector declined 0.3 %, which is higher than the first half 0.4 percentage point. According to the analysis of the situation, the chemical market is still being picked up, and is also a more stable, but still weak.
Fourth, export growth, and the rubber products still dominate.
According to Customs statistics, from January to September, the industry's total exports were US$133.47 billion, an increase of 3.4%, compared with zero growth in the same period last year, accounting for 8.3% of the country's total exports.
Among export products, rubber products still dominate. The first three quarters exports by the rubber products amounted to US$35 billion, a year-on-year increase of 6.2% in total industry exports of 26.2%, increased 0.7 percentage points compared with the same period last year. In addition, in recent years oil exports maintained a relatively fast growth, in the first three quarter oil exported 12 464 million tons, accounting for oil production (gas, coal, diesel total) of 5.8%, growing 45.3% YoY. Exports valued at US$12.43 billion, an increase of 38.3%, accounting for 9.3% of the industry's total exports.
On the whole, China's petroleum and chemical product export structure is in a single, standard is low. From the current export situation analysis, the outbound markets demand, while improving, but are sluggish.
Fifth, rapid economic growth in the eastern region showed better economic efficiency.
In the eastern region, revenue growth remained ahead of the game. From January to September, 11 Eastern Provinces and cities of petrochemical industry obtained an income of RMB6.36 trillion, increasing 9.6%, taking up 66.3% of the National Industries income. 8 central provinces obtained an income of RMB1.66 trillion, increased by 7.9%, taking up more than 17.3%. 12 western provinces, municipalities received an income of RMB1.57 trillion, an increase of 7.5%, accounting for more than 16.4 %.
Profit growth is mainly from the eastern region. From January to September, the Eastern Region petrochemical players got a total profit of RMB346.82 billion, a year-on-year increase of 21.3%, accounting for 57.2% of industry-wide total profit. The central region got a total profit of RMB103.95 billion, and with more than 1.2% growth, accounting for more than 17.1%. The western region got a total profit of RMB155.54 billion, increasing 3.3% YoY over the same period of the previous year, of total more than 25.7%. The present circumstances have shown, in the eastern regional industrial restructuring and upgrading achieved positive results, and ability to withstand risks significantly stronger than the middle and western regions.
3. Main problem.
First, some industry excess capacity still stands out as a problem.
The most recent data show that the three quarters, urea production increased 9.5% YoY, and the apparent consumption growth was only 3.8%, and the unit average utilization kept more than 90%, capacity release brought the market pressure. Caustic soda unit average utilization was around 75% and soda unit average utilization was about 83%. From January to September, unit operating rate in inorganic salt industry fell to 15.7%. In addition, the first three quarters, and PVC unit utilization was at about 61%, and methanol less than 60%, and their prices were also long-term low.
It is worth noting that, market demand growth for fertilizer, caustic soda and soda ash, and PVC products, has slowed down significantly, and industrial chain is shorter, relatively low value-added, the capacity expansion, should be particularly cautious in the surplus production capacity, there should be a greater intensity.
Second, chemical effective market demand is still low.
Since the beginning of this year, the main chemical demand growth has slowed down. Data shows that the three quarter major chemical apparent consumption increase was only 3.7%, 4.6 percentage point fall over a year earlier. The apparent consumption growth of inorganic chemicals was 4.5%, 1.5 percentage point lower than the same period of the previous year; that of organic chemicals was 5.1%, shrank 3.1 percentage points from the same period of the previous year; synthetic materials, increased only 2.2%, contracted 4.5 percentage points compared with the same term of 2012; synthetic fibers (polymer) in the apparent consumption decreased by 3.1%, compared to growth 8.1 %.
As a result of China's economic slowdown and the chemical demand growth has slowed in the past that more than 10% of the demand growth is difficult to reproduce. The market demand, consumption structure has also changed. There are indications that, bulk chemical products, such as soda ash, caustic soda, generic synthetic resin products, such as the capacity of the market is relatively stable, expansion becomes less, and specialty chemicals, new chemical materials, fine chemicals, the quality of products is one of the market demand in the main. New materials, new energy, and energy efficiency, environmental protection, and other emerging industries will become a future market demand.
Third, adjustment of the industrial structure will not be able to adapt to changes in the market.
In recent years, industrial structure in the domestic petroleum and chemical industry knew adjustment, although the steady progress, but is still not to adapt to changing market requirements. In some of the Chinese product surplus production capacity, and on the other hand some of the products and the huge amount of imports, in particular, organic and synthetic materials imported a large quantity. Customs data show that January to September, China's net imports for organic chemicals were 19 89 million tons, a year-on-year increase 12.4%, net imports of plastics were 19 574 million tons, compared to the same period last year there has been a slight reduction in the domestic synthetic resin production of 45.6%. Import the product reflects two aspects: First, the product more competitive more slowly. Such as methanol, as raw material costs, domestic products cannot compete with the Middle East region; second is the difference between the product and category is low. This is the case with synthetic material performance in the field. Such as synthetic resins, domestic general kind supplies are adequate, but special, and functional material scarcity, basic dependence on imports. It is worth noting that many domestic enterprises in the economies in transition on the upgrade are still hesitant to do so is likely to be eliminated from the market.
The most recent data show that the three quarters, urea production increased 9.5% YoY, and the apparent consumption growth was only 3.8%, and the unit average utilization kept more than 90%, capacity release brought the market pressure. Caustic soda unit average utilization was around 75% and soda unit average utilization was about 83%. From January to September, unit operating rate in inorganic salt industry fell to 15.7%. In addition, the first three quarters, and PVC unit utilization was at about 61%, and methanol less than 60%, and their prices were also long-term low.
It is worth noting that, market demand growth for fertilizer, caustic soda and soda ash, and PVC products, has slowed down significantly, and industrial chain is shorter, relatively low value-added, the capacity expansion, should be particularly cautious in the surplus production capacity, there should be a greater intensity.
Second, chemical effective market demand is still low.
Since the beginning of this year, the main chemical demand growth has slowed down. Data shows that the three quarter major chemical apparent consumption increase was only 3.7%, 4.6 percentage point fall over a year earlier. The apparent consumption growth of inorganic chemicals was 4.5%, 1.5 percentage point lower than the same period of the previous year; that of organic chemicals was 5.1%, shrank 3.1 percentage points from the same period of the previous year; synthetic materials, increased only 2.2%, contracted 4.5 percentage points compared with the same term of 2012; synthetic fibers (polymer) in the apparent consumption decreased by 3.1%, compared to growth 8.1 %.
As a result of China's economic slowdown and the chemical demand growth has slowed in the past that more than 10% of the demand growth is difficult to reproduce. The market demand, consumption structure has also changed. There are indications that, bulk chemical products, such as soda ash, caustic soda, generic synthetic resin products, such as the capacity of the market is relatively stable, expansion becomes less, and specialty chemicals, new chemical materials, fine chemicals, the quality of products is one of the market demand in the main. New materials, new energy, and energy efficiency, environmental protection, and other emerging industries will become a future market demand.
Third, adjustment of the industrial structure will not be able to adapt to changes in the market.
In recent years, industrial structure in the domestic petroleum and chemical industry knew adjustment, although the steady progress, but is still not to adapt to changing market requirements. In some of the Chinese product surplus production capacity, and on the other hand some of the products and the huge amount of imports, in particular, organic and synthetic materials imported a large quantity. Customs data show that January to September, China's net imports for organic chemicals were 19 89 million tons, a year-on-year increase 12.4%, net imports of plastics were 19 574 million tons, compared to the same period last year there has been a slight reduction in the domestic synthetic resin production of 45.6%. Import the product reflects two aspects: First, the product more competitive more slowly. Such as methanol, as raw material costs, domestic products cannot compete with the Middle East region; second is the difference between the product and category is low. This is the case with synthetic material performance in the field. Such as synthetic resins, domestic general kind supplies are adequate, but special, and functional material scarcity, basic dependence on imports. It is worth noting that many domestic enterprises in the economies in transition on the upgrade are still hesitant to do so is likely to be eliminated from the market.
4. Projections.
Based on the current macroeconomic situation, and the petroleum and chemical industries, the Running Trends, CPCIF are expected in the year 2013, the oil and chemical industry main income RMB13.35 trillion, compared with the same growth rate of about 10%, of which 4th quarters represent an increase of about 10%. Total profits are expected to be RMB900 billion in 2013, an increase of 10.5%; exports in total US$180 billion, increased by about 4.5%. It is expected that 2013 chemical sector main business revenue would be approximately RMB8 trillion, growing 12% YoY. Total profits are forecast at RMB420 billion, growing approximately 11%.
It is expected that in 2013, the apparent consumption of crude oil would be about 495 million tons, growing 4.5%, that of natural gas about 164.5 billion cubic meters, increasing 15.5%; oil about 289 million tons, increasing 4.0%, of which diesel about 172 million tons, increasing of 0.5%; fertilizer about 74 million tons, an increase of 4.5%, of which urea about 28 million tons, increasing 4%; resins about 85 million tons, growing about 6.5%; ethylene about 17.7 million tons, up 8.5%; caustic soda about 26.8 million tons, an increase 5.0%.