The relevant information this week is as follows:
1. Raw material
Crude oil: Brent crude oil and WTI crude oil continue to fluctuate at low levels. The OPEC+ production reduction
discussion on November 30 failed to reach an agreed target. Many OPEC+ member states announced additional voluntary production cuts, with the total production reduction reaching 2.2 million barrels per day. Analysts believe
that there are currently many internal contradictions in OPEC+, and the production reduction is voluntary rather than mandatory. This has raised questions in the market about whether member states will follow up and implement production reductions. Therefore, international hedge funds have increased their bearish bets.
Natural gas: Natural gas is currently entering its peak season, and the JKM index continues to rise.
2. Production capacity
Among the country’s major production and refineries, Gaoqiao Petrochemical’s production is resuming, Jingmen
Petrochemical’s sudden equipment failure caused a shutdown, and the rest are in normal production. Daqing Refining and Chemical Co., Ltd. (about 1,000 tons), as a major producer, continues to reduce production by 50% to cope with the downward trend due to serious inventory backlog and limited sales.
3. Stock
Based on news from multiple information platforms, the total domestic paraffin inventory has been rising steadily since the National Day. The market has been sluggish in recent weeks, but production has continued and is now at its highest level for the year. Among them, the inventory of PetroChina, which is the largest producer of production capacity, is still increasing. Sinopec’s inventory is gradually decreasing due to production suspensions and failures.
4. Market demand
After the National Day, terminal demand was mainly due to rigid demand, and major dealers had almost no stockpiling behavior. Due to sales tasks, the market transaction prices of most models are lower than the listed prices. The Daqing market has been trading about 200 yuan lower than the listed prices for several consecutive weeks.
5. Industry analysis overview
Major manufacturers of PetroChina announced on December 1st this Friday that the listed prices of various products will drop by 100-200 yuan, and they will tentatively adopt a “Insured sales” model within the next month. Sinopec will determine its response strategy next week, and a drop in trading prices is a foregone conclusion.
“Insured sales”: The manufacturer will give A-level dealers cash rebates based on the listed price. The amount of the cash rebate will be determined later based on the actual market performance.
6. Price expectations
Based on the above analysis, PetroChina and Sinopec officially announced that they have entered a state of decline. In addition to lowering their listing prices, they also added their “Insured sales” strategy, which shows that the
market is extremely difficult. Judging from costs such as oil prices, it is very likely that there will be another decline. However, due to the implementation of control measures such as “Insured sales”, it is difficult to reflect this clearly.