Metallurgy / Chemicals / Rubber & Plastics

Huacheng Import and Export Data Observation reported that the prices of crude oil, natural gas, coal and other bulk energy materials in the international market rose sharply due to the impact of the epidemic and the international situation, and the prices of refined oil market also fluctuated widely. In the context of the obvious intensification of the triple pressures of domestic economic demand contraction, supply shock and expected weakening, 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 Conference to analyze the situation, current situation and development trend of the industry, actively seek new development opportunities for the refined oil market, and promote the healthy development of the refined oil market.

At present, the century-old changes and the century's epidemic situation have evolved, and the "black swan" and "grey rhino" events have emerged in endlessly, and the downside risks of the global economy have intensified. 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 sharply, which has had a great impact on China's economic development and industry operation. The triple pressures of domestic economic demand contraction, supply shock and expected weakening have been significantly intensified. The prices of domestic refined oil products have risen repeatedly, the transportation costs have increased significantly, and the procurement costs of downstream raw materials have increased significantly. According to the statistics of the China Petroleum and Chemical Industry Federation, the operating costs of enterprises above designated size in the whole industry increased by more than 20% in the first five months on a year-on-year basis.

Refining overcapacity and continuous increase of refined oil

The import and export data show that in the first half of this year, China's crude oil and product oil output maintained growth, 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, China will become the world's largest oil refining country for the first time in 2021, with an oil refining capacity of 910 million tons, accounting for 18% of the global oil refining capacity, and exceeding 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 in a structural surplus, which is an objective fact that cannot be ignored. The data shows that the refinery capacity built in China has not fully played its role. At the same time, China's refined oil exports are gradually reducing export quotas under the background of the "double 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 has been alleviated, Europe and the United States have ushered in a travel peak, and the demand for refined oil products in Asia is also strong. However, due to the transformation and upgrading of refineries in the past few years, the supply and demand of the global refined oil market has tightened. The situation of supply exceeding demand has kept the price of international refined oil at a high level. 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 capacity.

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 triple pressures of demand contraction, supply shock and weakening expectations, and the petroleum and petrochemical industry is also facing the problem of consumption contraction. According to the statistics of the China Petroleum and Chemical Industry Federation, the apparent consumption of oil and gas in China from January to June decreased by 1.4% year-on-year, while the apparent consumption of basic chemical raw materials and synthetic materials decreased by 0.3% and 6.7% year-on-year respectively; The downstream growth of the industrial chain of petroleum and chemical industries such as real estate, automobile, textile, building materials, light industry slowed down, and the supporting role of consumption demand for petroleum and petrochemical industry weakened. At present, opening up the international trade market and expanding effective demand are the primary tasks before the whole industry.

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

The ship fuel market is in short supply and low sulfur ship fuel is hot

Since the implementation of the "sulfur limitation order" by the International Maritime Organization in 2020, the global ship fuel market has been in short supply as a whole, and the regional markets tend to be polarized. Low-sulfur ship fuel has become the main supply product, and the global low-sulfur ship fuel resource supply sources are more concentrated. On July 29, China Petroleum Circulation Association statistics on import and export data showed that the scale of Sinopec fuel oil company's ship refueling operation in 2021 was 25% larger than that of the previous year, with the growth rate 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 company supplies Sinopec's self-produced low-sulfur ship fuel, accounting for 60% of the country's low-sulfur ship fuel output, and the domestic bonded ship fuel market share continues to increase, ranking first in the country.

In recent years, the production of low sulfur marine fuel in China has been the focus of the global market. Compared with Singapore, under the guidance of domestic and foreign dual-cycle economic policies, domestic low-sulfur marine fuel resources have effectively maintained the stable supply of the market and guaranteed the oil demand of China's foreign trade ships. The main suppliers of China's ship oil supply market are Sinopec fuel oil, China Ship Fuel Oil, CNOOC Fuel Supply, China Petroleum Fuel Oil, and China Long Term Fuel Oil, with a market share of more than 93%.

China's marine oil supply market has a great potential for growth, and the advantages of low sulfur marine fuel quality are gradually apparent: the viscosity of domestic resources is stable, which is convenient for temperature control during the use of ships; 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, able to optimize customer product selection strategy; The blending component is excellent, and there is no risk of chemical pollution. Ship owners generally feedback that the low-sulfur ship fuel produced by Chinese refineries has good stability, safe and reliable use performance and reliable product quality.

The localization of low-sulfur marine fuel resources has a significant impact on China's marine oil supply market. First, it ensures the stability of the global shipping supply chain. The release of the capacity of China's refineries has provided more supply guarantee for global navigation ships during the epidemic and effectively guaranteed the stability of the global shipping market. Second, it has promoted the development of foreign trade. As an export-oriented product, the bonded low-sulfur ship fuel produced by Chinese refineries has effectively helped the development of China's foreign trade. Third, promote the significant improvement of 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 fuel supply scale, actively integrated into the development of various 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. In the environment of gradually opening up the market, strengthen the industry leadership, and the global influence of China's enterprise ship oil supply brand continues to increase.

At present, some domestic refineries have taken low-sulfur ship fuel 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.

Lubricant 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 ways to help industrial enterprises achieve the "double carbon" goal. In recent years, the substitution of renewable energy for fossil energy such as oil is the general trend. The demand for most of the refined oil in the end-use energy industry has further declined, but the rigid demand for lubricating oil in the construction 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 many international brands and gradually mature private enterprises in the domestic lubricant market. The whole market is in full bloom.

It cannot be ignored that the domestic lubricant industry still has problems such as low localization rate, weak brand awareness and influence. The structural contradictions of low-end overcapacity and high-end capacity shortage are the main contradictions of the lubricant industry. In particular, the internationalization process of private lubricating oil 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 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, strengthen its independent innovation capacity, strive to create a new driving force for collaborative innovation and development of the whole industrial 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 national standards for the lube base oil industry. Central enterprises, such as PetroChina, Sinopec and CNOOC, implement integrated operation, formulate lubricant base oil standards and implement them in branches and refineries; Shell and manufacturers with close contact with foreign companies use API (American Petroleum Institute) base oil classification standard API-1509; Other manufacturers develop 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.