Fundamentals of weak chemical growth are difficult to continue

Yesterday. The domestic commodity market staged a chemical counter-attack drama. Under the backing of rising oil prices, chemical products rose sharply. PP, PVC, methanol, plastic and other varieties led the disk. Analysts believe that the short-term increase in oil prices is mainly due to the accidental sharp decline in the United States crude oil inventories, but this situation is not sustainable, and oil prices may soon return to decline.

U.S. crude oil inventories dropped unexpectedly

The United States once again became the baton that dominated the volatility of oil prices. On Wednesday, the US market reported two favorable news for oil prices: crude oil inventories dropped sharply and the number of US oil drilling rigs decreased. When this news came out, US oil and cloth ended the differentiation trend and both rebounded sharply. US NYMEX February crude oil ** rose 1.36 US dollars, or 3.76%, to 37.50 US dollars / barrel, to get rid of the recent slump; ICE Brent February crude oil ** rose 3.46% to 37.36 US dollars / barrel, both for a week High position.

The data released by the US Energy Information Administration (EIA) on Wednesday showed that as of the week of December 18, US crude oil inventories decreased by 5.87 million barrels to 484.8 million barrels, a decrease of 1.2%, and an increase of 1.2 million barrels was expected.

In addition, due to the holiday season, the number of drilling rigs for this week was announced in advance. According to data from Baker Hughes, the US oil service company, the number of active oil drilling in the United States decreased by 3 to 538 in the week ending December 25, a decrease in the 5th week in the past 6 weeks.

Under the boost of a rare increase in crude oil, the domestic repression of chemical products has been counter-attacked. From the disk point of view, PP ** yesterday morning continued sharply higher after opening higher, hit a high of 5951 yuan / ton, to close at 5887 yuan / ton, an increase of 2.6%, positions increased significantly; PVC ** hit two in the plate The monthly high of 4,895 yuan / ton; methanol, up 1.18%, recorded five consecutive yang; even plastic ** touched a month high of 7,915 yuan.

According to industry insiders, under the boost of the rising oil market, the domestic chemical industry has risen in reasonable terms. However, recent twists and turns in commodities after the US interest rate hike has shown that such a rebound is likely to turn into a lure for the market. The rebound in oil prices is not sustainable, and chemical products may also be returned to the original shape as the price of oil falls.

Analysts believe that despite the news that the United States reported that the price of Lido oil, but in actual terms, the US crude oil production in November was 9.11 million barrels per day, only a slight decline remained at a high level; OPEC November production increased by 230,000 barrels to 3169.50 million Barrel/day, the highest since April 2012. Therefore, the solution to the problem of excess oil will not happen overnight. In the future, oil prices may continue to bottom out.

Disadvantages in chemical products

Yesterday, the trend of some chemical products also showed two points: First, the chemical market was clearly differentiated; second, it was expected that the price of oil would fall back. This is reflected in the differentiation of chemical products and the rise and fall of differentiation. As yesterday's rubber **1605 contract fell sharply yesterday, eventually closing the green disk.

Analysts believe that, as a whole, the chemical industry can not escape the fate of excess capacity, is an indispensable area of ​​China's economic structure.

At the China Petroleum and Chemical Industry Federation held in the middle of this month, Li Shousheng, president of the China Petrochemical Federation, pointed out that the national petrochemical industry is currently facing downward pressure. From January to October, the main business revenue of the petrochemical industry decreased by 6.1% year-on-year, total profit decreased by 24.1%, and total import and export volume decreased by 22.3%. "Three swords fell at the same time." This has never happened before, and the impact on the entire industry may be even greater than the 1998 Asian financial crisis.

Li Shousheng said that one of the major factors restricting the development of the petrochemical industry is structural excess capacity, not absolute excess. For this reason, the industry economic work in 2016 should focus on structural adjustment.

In the weak fundamental pattern, the prices of domestic chemical products will continue to be under pressure. Judging from the specific varieties, Zheshang ** analyzed that LLDPE had a good profit, the operating rate was at a high level, and the petrochemical and port inventories both fell; the high season of shed film had come but there was no obvious stocking; in terms of PP, the price of propylene was still weak. The proportion of wire drawing production remains high, but the level of downstream production is generally low. Several petrochemical manufacturers released the maintenance plan in 2016, which has boosted market sentiment. Increases in methanol imports and imports, weakening of traditional consumption in winter, decline in international oil prices, and other negatives remain. The short-term methanol region temporarily stopped falling. In the medium to long term, there is still a need to pay attention to the fundamentals and peripheral macro factors. On the whole, LLDPE and PP** support are strong and methanol is weak.

In addition, rubber prices have also been moving toward oil prices. Industrial product prices look at consumption, and agricultural product prices look at supply. In terms of fundamentals, the rubber market has continued to be in a dilemma of producing more than sales. At present, there is no sign of improvement. Judging from the domestic monthly production trend of tires, the output levels of each month this year showed negative growth year-on-year, while the total tire production in the first 10 months fell by 16.44% year-on-year. At the same time, China's tire exports in the United States and Europe have also been adversely affected, and exports have been falling. The long-term weakness of rubber prices is hard to change.