Monthly report on the chemical industrial products

The monthly report of the chemical industrial products market in February 2008

I. The key points of macroeconomic changes this month

1. The global economy has shown obvious signs of recession. According to statistics, the average growth rate of world GDP in 2007 was 5.3%. Due to the decline of economic data of major economies in the world, the growth rate is expected to slow down to 4.6% in 2008. In 2007, China's GDP growth rate was 11.4%, which is expected to be reduced to no more than 0.5% of the load indication this year; 9.9%。 According to the capital flow direction released by CFTC, due to the decline of global real estate prices and the relatively low performance of the stock market, the bulk commodity market dominated by agricultural products and precious metals has attracted more and more capital

2. At the end of February, the US dollar broke the record low, and the high level of crude oil broke the record high. Oil prices rose sharply this month, hitting the historical price of $100/barrel again, and successfully stood above $100/barrel at the end of the month. It is becoming more and more realistic to assume that the price of oil futures will continue to rise in a zigzag range above $100/barrel in the quarter of 2008

3. The seasonal decentralization of domestic loans has intensified. According to statistics, about 1.8 trillion yuan of funds will be released on the open market in the first half of 2008. Among them, the amount of funds released due in March is close to 600billion yuan. This situation will continue, which will temporarily relieve the financial pressure of enterprises

4. There are obvious signs of the spread of domestic price rises this month. Combined with the influence of Spring Festival, snow disaster, rising energy prices, rising labor costs and other factors, the CPI increase in February may exceed 8%. This indicates that in order to curb inflation, the government may adopt a tougher monetary tightening policy this year

II. Overview of crude oil market this month

the current performance of crude oil is profoundly affecting the world, and the economic pattern of retesting with additional samples instead of waste samples. Fuel oil, PTA and LLDPE belong to the downstream varieties of petrochemical industry, and their price trend will also be affected by crude oil. First of all, let's pay attention to the performance of the crude oil market. The performance of crude oil in this month is also commendable. Under the influence of many positive factors, the price of crude oil soared all the way, hitting the $100 mark for the third time, and is now basically stable. We will elaborate on the recent situation of the international crude oil market below. We summarize the main factors affecting crude oil prices in the near future as follows:

1. Crude oil supply and demand

Table 1 world crude oil supply and demand balance table in year 1 (source: OPEC monthly report in February)

OPEC statistical data (see Table 1). In 2006, global crude oil supply and demand showed that supply was less than demand, and the average demand gap for crude oil was about 0.19 million barrels/day. The data of 2007 showed that except for the second quarter, the demand gap of crude oil in other periods greatly exceeded that in 2006, with an average annual demand gap of about 0.94 million barrels/day

Figure 1 crude oil supply and demand balance in 2008 (source: OPEC February monthly report)

meanwhile, according to the world economic development, OPEC predicted the crude oil balance in 2008. In 2008, the world crude oil demand increased by about 1.5%, and the growth of crude oil supply other than OPEC is expected to exceed the average level. Therefore, we speculate that the possibility of OPEC increasing production in the first quarter is very small. At the same time, the market is also very concerned about the regular meeting of OPEC oil ministers on March 5. It is reported that OPEC is considering reducing production. Although it is unlikely to reduce production, at least there is no option to increase production in the current formulation, indicating that the current oil price will not be suppressed by OPEC's increase in production

2. Changes in U.S. crude oil inventory

Figure 2 changes in U.S. crude oil inventory (unit: million barrels)

in the first ten days of January 2008, the U.S. EIA crude oil inventory reached a low point since 2004. After the winter oil supply worries eased, as of February 22, the U.S. inventory had a trend of increasing for seven consecutive weeks, but it has not yet recovered to the same level as the same period last year, which indicates that the crude oil supply in 2008 is still tight

3. Position of New York crude oil futures fund

Figure 3 position of New York crude oil futures fund

as of February 19, the statistical data still showed that the fund had increased its net long position for two consecutive weeks, and the latest position increase was relatively large. In terms of oil price performance, WTI hit $100/barrel again and successfully stood above $100/barrel. This shows that the fund is very willing to push the oil price to a record high, and $100/barrel has once again become a relay station on the way up the oil price

4. Geopolitical impact

in mid February, Nigeria's oil facilities were damaged, Venezuela stopped supplying oil to ExxonMobil, and the Texas refinery of the United States exploded. Turkey's entry into Iraq to combat the PKK armed forces once again ignited concerns about the possible interruption of supply. Successive changes have gradually changed the atmosphere of the international crude oil market, pushing crude oil to break through the $100/barrel mark

to sum up, crude oil is currently in a sensitive area near $100, and it is expected to test the $100 mark repeatedly. It is expected that in the future, against the background of the continuous decline of the US dollar, the crude oil will remain above US $100 for some time before the fund gives up pushing up crude oil. However, considering the gradual decline of quarterly crude oil demand, the market is also very concerned about the regular meeting of OPEC oil ministers on March 5. If there is a decision to reduce production, it is expected to support crude oil prices to a new high. If the original output is maintained, the crude oil price is expected to remain high

second, fuel oil rose with crude oil, and short-term demand accelerated

1. Review of the futures market this month

driven by the surge in crude oil at the beginning of February, it has remained strong, rising all the way from around 3900 at the beginning of the month, and reaching the high point in the early stage of the futures price in late February, it fluctuated repeatedly around 4250. At the end of September, a natural gas terminal facility in Britain caught fire and was connected to the natural gas pipeline in continental Europe. The facility was shut down immediately after the fire. Affected by this news, it triggered the rise of crude oil. With a large number of funds entering Shanghai fuel oil futures, the position increased rapidly, and the futures price broke through the big positive line, hitting a new high. At present, it continues to test the upper edge of the long-term rising channel

Figure 4 recent trend of Shanghai fuel oil futures (data source together with phase 1 project: Wenhua Finance)

2. Analysis of recent factors affecting fuel oil price

crude oil price

the domestic fuel oil market has always been a shadow market for crude oil. Shanghai fuel oil follows the trend of crude oil clearly, with strong recent performance, and the crude oil price has played a great supporting role

Asian fuel oil market

Singapore's fuel oil price has broken through the resistance level of $480/ton at the end of February, but encountered stronger resistance around $500/ton. Therefore, when the international crude oil reached a record high, Singapore's fuel oil price is still quite far from last year's record high (US $529/ton), which widened the cracking gap between Singapore's paper goods and Brent crude oil to about US $22. The main reason for Singapore's weak paper goods is abundant supply, while China's demand has not increased significantly for the time being. Recent changes in China's fuel oil demand have also had a positive impact on the Singapore market. The sales volume of Singapore tanker refueling market increased significantly in January, and the bunker market also performed strongly recently

Figure 5 Singapore road residual oil inventory (source: huataixing fuel oil weekly)

note: the source of this reprint is indicated. The reprint is for the purpose of transmitting more information, and does not mean to agree with its views or confirm the authenticity of its content