Metallurgy / Chemicals / Rubber & Plastics

According to the observation report of Huacheng's import and export data, affected by the epidemic situation and the international situation, the prices of crude oil, natural gas, coal and other bulk energy materials in the international market rose significantly, and the prices of refined oil market also fluctuated widely. In the context of the triple pressures of shrinking domestic economic demand, supply shocks and weakening expectations, the operation of the domestic refined oil market is facing greater challenges.

Recently, the China Petroleum and Chemical Industry Federation held the 2022 National Petroleum and Chemical Industry Economic Situation Analysis Meeting to analyze the situation, current situation and development trend faced by the industry, actively seek new development opportunities for the product oil market, and promote the healthy development of the product oil market.

At present, the century old changes and the century's epidemic situation have evolved together. "Black Swan" and "Grey Rhinoceros" events have emerged one after another, and the risk of global economic downturn has increased. Since this year, affected by the epidemic situation and the international situation, the prices of crude oil, natural gas, coal and other bulk energy materials in the international market have risen significantly, which has had a great impact on China's economic development and industry operation. The triple pressures of shrinking domestic economic demand, supply shocks, and expected weakening have obviously intensified. The price of domestic oil products has risen for several consecutive times, transportation costs have significantly increased, and downstream raw material procurement costs have significantly increased. According to the statistics of the China Petroleum and Chemical Industry Federation, the operating costs of enterprises above designated size in the industry rose by more than 20% year on year in the first five months.

Continuous production increase of refined oil products with excess refining capacity

The import and export data show that in the first half of this year, China's crude oil and product oil output kept growing, with the national crude oil output increasing by 4% year on year and the product oil output increasing by 1.7% year on year, of which the gasoline output increased by 0.2% year on year and the diesel output increased by 15.6% year on year.

At present, China's refining capacity is at the highest level in the world. According to import and export data, in 2021, China will become the world's largest oil refining country for the first time, with a refining capacity of 910 million tons, accounting for 18% of the global refining capacity, surpassing the 907 million tons of the United States. However, in the first half of this year, the capacity utilization rate of China's refining units was only about 71%, far below the global average of 90%. Compared with the domestic refined oil market, China's refining capacity is structurally surplus, which is an objective fact that cannot be ignored. The data shows that China's built refining capacity has not yet fully played its role. At the same time, China's refined oil exports are gradually reducing export quotas under the background of the "dual carbon" policy.

Since this year, the demand for refined oil in the international market has been strong, and the prices of the three major refined oil markets in the United States, Western Europe and Singapore have reached new highs. After the epidemic eased, Europe and the United States ushered in a peak of travel, and the demand for refined oil in Asia was also strong. However, due to the transformation and upgrading of refineries in the past few years, the supply of large refining countries has decreased, and the supply and demand of the global refined oil market has tightened. The situation of oversupply has kept the price of international refined oil high. With the gradual recovery of the economy, the operating rate of overseas refineries is basically at the stage of rebounding to a high level. The refining units in the United States, India and other countries are operating at full power.

The lack of effective demand in the domestic market is the main contradiction in the current economic operation. The Central Economic Work Conference held at the end of last year pointed out that China's economic development is facing the triple pressures of shrinking demand, supply shocks and weakening expectations, and the petroleum and petrochemical industry is also facing the problem of shrinking consumption. According to the statistics of China Petroleum and Chemical Industry Federation, from January to June, China's apparent consumption of oil and gas fell by 1.4% year on year, while the apparent consumption of basic chemical raw materials and synthetic materials fell by 0.3% and 6.7% year on year respectively; The downstream growth of the petroleum and chemical industry chain, such as real estate, automobile, textile, building materials and light industry, slowed down, and the supporting effect on the consumption demand of the petroleum and petrochemical industry weakened. At present, opening up the international trade market and expanding effective demand are the primary tasks facing the whole industry.

In the long run, in the context of overcapacity in domestic refining, the petroleum and petrochemical industry should improve the market access threshold, strictly control the approval of new refining projects, adhere to the integrated development of refining and chemical industry, and adhere to the innovation driven high-end and differentiated development path under the condition of basic balance between supply and demand, so as to fundamentally improve the overall competitiveness and efficiency of the industry.

Shortage of supply and demand in the ship fuel market Low sulfur ships are hot

Since the International Maritime Organization implemented the "sulfur limitation order" in 2020, the global ship fuel market has been in short supply as a whole, and the regional markets have tended to polarization. Low sulfur ship fuel has become the main supply product, and the sources of global low sulfur ship fuel supply have become more concentrated. On July 29, the import and export data of China Petroleum Circulation Association showed that Sinopec Fuel Oil Company's ship refueling business scale in 2021 will expand by 25% over the previous year, ranking first among the world's top ten ship refueling enterprises and becoming the world's fifth largest ship refueling company. Low sulfur ship fuel is one of its main business products. At present, the fuel consumption of Sinopec's self-produced low sulfur ships accounted for 60% of the national low sulfur ship fuel output, and the domestic bonded ship refueling market share continued to increase, ranking first in China.

In recent years, China's low sulfur ship fuel production is the most concerned situation in the global market. Compared with Singapore, under the guidance of domestic and foreign dual cycle economic policies, domestic low sulfur ship fuel resources have effectively maintained stable supply in the market and guaranteed the oil demand of China's foreign trade ships. The main suppliers of China's ship oil supply market are mainly Sinopec fuel oil, China Shipbuilding Fuel, CNOOC Fuel, China Petroleum Fuel, and China Long term Fuel, accounting for more than 93% of the market share.

The growth potential of China's ship oil supply market is great, and the advantages of low sulfur ship fuel quality are gradually emerging: the viscosity of domestic resources is stable, which is convenient for temperature control when ships are used; The sulfur content control standard is superior to the requirements of the International Maritime Organization, which can effectively avoid compliance risks caused by quality fluctuations; Strong stability and compatibility, can optimize customer product selection strategy; The blending components are excellent, and there is no risk of chemical pollution. Ship owners generally feedback that the low sulfur ships produced by Chinese refineries have good stability, safe and reliable performance, and reliable product quality.

The localization of low sulfur ship fuel resources has a significant impact on China's ship oil supply market. First, it has guaranteed the stability of the global shipping supply chain. The release of China's refinery capacity has provided more supply guarantee for global navigation ships during the epidemic, and effectively guaranteed the stability of the global shipping market. Second, it promoted the development of foreign trade. As an export-oriented product, bonded low sulfur ship fuel produced by Chinese refineries has effectively helped the development of China's foreign trade. Third, we will significantly enhance the global influence of China's ports. The development of low sulfur ship fuel has driven the development of the whole domestic industrial chain, promoted the continuous expansion of ship oil supply scale, actively integrated into the development of coastal free trade zones, and accelerated the construction and development of China's port economy. Fourth, promote the specialization and standardization of ship oil supply to a new level. Under the environment of gradual opening up of the market, the industry leadership was strengthened, and the global influence of China's enterprise ship oil supply brand continued to increase.

At present, some domestic refineries have taken low sulfur ship combustion as one of the main refining products. On the basis of strict bench and ship tests in the early development process, Sinopec and other enterprises have incorporated low sulfur ship fuel into the company's overall quality management system to ensure product quality, which is of great significance for ensuring shipping safety.

The lubricating oil industry needs to move towards high-end and large-scale

Lubricating oil is the "blood" of industrial equipment. Innovative development of industrial lubrication technology is one of the important paths to help industrial enterprises achieve the goal of "double carbon". In recent years, the substitution of renewable energy for fossil energy such as petroleum is a general trend. The demand for most refined oil products in the end use energy industry has further declined, but the rigid demand for lubricating oil in engineering machinery, automobile and other industries still exists. According to import and export data, China has developed into the world's largest lubricant market in recent years, with an annual total output of about 8 million tons. At present, there are not only many international brands, but also mature private enterprises in the domestic lubricating oil market. The whole market presents a situation of letting a hundred flowers blossom.

It cannot be ignored that the domestic lubricating oil industry still has problems such as low localization rate, weak brand awareness and influence. The structural contradiction of low-end overcapacity and high-end capacity shortage is the main contradiction in the lubricating oil industry. In particular, the internationalization process of private lubricant enterprises is slow, and the innovation ability is generally weak. The whole industry needs to change its development mode, and gradually move from low price and low quality to high quality competition.

First of all, optimizing the product structure and eliminating backward production capacity are the first problems to be solved by the market. Secondly, the lubricating oil industry should increase investment in scientific research, effectively enhance the ability of independent innovation, strive to create a new driving force for coordinated innovation and development of the whole industry chain, and promote the efficient transformation of scientific research achievements. Finally, promote the standardization construction of China's base oil industry. At present, China has not promulgated a national standard for the lube base oil industry. PetroChina, Sinopec, CNOOC and other central enterprises implement integrated operation, and formulate lubricating base oil standards respectively and implement them in branches and refineries; Shell and manufacturers closely connected with foreign companies use API (American Petroleum Institute) base oil classification standard API-1509; Other manufacturers shall formulate standards suitable for their own enterprises according to their own patented technology and production process characteristics. The implementation of standardization can promote the integration of social resources, improve social efficiency, reduce transaction costs, and promote independent innovation and open innovation.