Concentration of production capacity to release the continuation of the chemical industry
After adjustments from 2004 to 2006, the chemical industry entered a clearly rising economic cycle in 2007 and will continue for the next two years. The fundamental driving force for the recovery of the chemical industry comes from the digestion of surplus production capacity in the industry's low-end period, sharp drop in investment scale, and accelerated elimination of outdated production capacity. The overall release of production capacity was controlled and the degree of concentration increased, which improved the status of disorderly market competition.
In the chemical industry (excluding petroleum and processing, that is, basic chemicals in general, the same below) began to enter a period of significant increase in prosperity, while comprehensive chemical project construction cycle, industry investment data and other factors, the industry estimates, the chemical industry The peak of the boom cycle may come after 2009, and the possibility of continuation of the industry's economy will increase due to the influence of macro-control.
The formation of the current cycle of business cycle Before 2004, the large amount of production capacity formed by the intensive investment in the chemical industry was concentrated in the following two years. From 2004 to 2006, the chemical industry entered a declining stage. It showed that the industry's profit rate continued to decline from the high point of 7.15% at the end of 2004. In 2005 and 2006, the profit rate was only 6.09% and 59% respectively. The total profit growth of the industry was even faster. From 80% in 2003 and 2004 to a rapid drop to 15% in the following two years.
However, even in the downturn phase, the chemical industry still has important positive factors. The outstanding performance is that the industry demand is still strong, and the development speed has not slowed down and absorbed a large amount of surplus production capacity. From 2004 to 2006, the chemical industry's revenue remained at around 30%. Compared with the dramatic changes in total profits, the decline rate was not obvious and the industry's capacity rapidly expanded. While solving the problem of historically excessive investment in rapid development, the decline in profitability of the industry and the government's control over the investment scale have slowed investment growth, and the supply and demand situation of the chemical industry began to change in 2007.
With the rapid promotion of downstream demand, the chemical industry began to usher in a new round of economic cycle in 2007. From January to November 2007, the profit rate of the chemical industry gradually recovered to 6.31%, and the total profit increased by more than 50% year-on-year.
The extension of industry prosperity may be due to the fact that there are many sub-sectors in the basic chemical industry. The actual situation is complex and the overall accurate judgment is more difficult. According to the investment cycle of 2 to 3 years, the current round of industry investment will start to increase from the end of 2007. Although there is no support for the specific investment data of the industry in recent months, according to industry and company level observations, the investment enthusiasm of the major chemical industries and enterprises has not declined. With the increase in profitability and good prospects in the chemical industry, it is believed that overall investment in the industry will not shrink at least. Therefore, as far as the industry as a whole is concerned, the release of new production capacity will put pressure on the industry's earnings in 2009.
At the same time, the possibility of prolonging or fluctuating the economic cycle of the chemical industry also exists. The main reasons are: the downstream demand may exceed expectations, such as the start of biomass energy, the demand for fertilizers and pesticides continues to prosper, the growth rate of domestic investment scale has no significant decline, and energy saving Consumption, environmental protection, security, land, water and other hidden factors will become a long-term constraint; upstream resources will become a potential factor in restricting the release of production capacity, and may cause structural changes in the industry, the trend of integrated development is increasingly significant; the industry survival of the fittest, the government to promote the industry Integration may promote the improvement of industry concentration.
Benefiting from the rapid increase in demand brought about by the recent agricultural commodity bull market, major fertilizers and agricultural demand have risen rapidly in the short term. Due to the low short-term supply flexibility, it caused a strong rise in the prices of all related products.
Prices in 2007 soared to record a new record for fertilizers and pesticides for more than a decade. The urea Baltic FOB price has increased from US$200/ton in mid-2006 to the current RMB 391/ton, an increase of 95%. The potassium chloride price of potassium chloride in Canada rose from about 175 US dollars per ton in 2006 to the current 413 USdollars per ton, an increase of 136%. The international diammonium price has also soared from the long-term equilibrium price of around US$250/ton to US$1,000/ton, an increase of 300%. Glyphosate was less than 30,000 yuan/ton in 2006 and currently is 95,000 yuan/ton, up more than 200%.
As the world's potash fertilizer demand grows faster than nitrogen and phosphate fertilizers, and the global potash fertilizer resources and supply are extremely concentrated, the remaining production capacity is concentrated on individual companies, and the price increase trend is more obvious. As a large importer of potash fertilizer, China has long relied on imported resources to meet domestic demand and is a passive recipient of international prices.
The growth of nitrogen fertilizer production capacity will accelerate the production. The urea industry will increase its cost, accelerate the expansion of production capacity, and have a complex structure. As industry costs and gridlines are getting higher and higher, non-compliance is in a difficult position. In addition, electricity, transportation and other prices have increased pressure, natural gas suppliers such as PetroChina, Sinopec gradually took a favorable position in the game, the natural gas rising trend is clear, and the gross profit margin of natural gas-based urea companies continues to shrink. In 2007, domestic urea production was 24,857,000 tons (constrained), a year-on-year increase of 11.5%, and domestic urea production capacity was further enlarged. The increase in profitability of the industry in 2007 has increased the driving force for the expansion of some enterprises, and the speed of construction of new projects has also accelerated. After 2008, new capacity in the urea industry will not be significantly reduced.
It should be noted that the market cannot ignore the complicated structural features of China's urea (even nitrogen fertilizer) industry. China's nitrogenous fertilizer industry has many levels. Various technologies, routes, and scales coexist, and the costs of different companies vary widely. With the close of price and cost, high-cost devices will have to reduce the operating rate or even completely stop production. The sensitivity of the supply of the industry to the price increases, the cost-leading enterprises are protected, and the small and medium-sized urea production enterprises with high energy consumption and technological backwardness may be Losses continue, and some will even be eliminated.
The value of phosphate fertilizer resources highlights the cumulative increase in phosphate fertilizer prices completed in 2007 for several years. This is the release of accumulated energy from the continuous integration within the petrochemical industry in the past few years. The gradual reduction in the elasticity of supply in the industry has evolved into a explosive price surge in the face of unexpected demand.
People in the industry believe that in the future, the phosphate fertilizer industry will evolve around major factors such as international demand, China's export policies, and raw materials (sulfur, phosphorite, etc.). In the world, the demand for phosphate fertilizers is sustainable in the medium term, and the global phosphate fertilizer plant utilization rate continues to increase, supply and demand are more intense, and the industry boom will operate at a high level.
With respect to raw materials, the contradiction between the supply and demand of sulfur will not be substantially relieved until 2009, and domestic phosphate fertilizer companies will still rely mainly on imported sulfur and passively accept pricing in the international market. In the long term, due to the greater resource value of phosphate ore, the international market pricing is more efficient, reflecting the dual impact of increased concentration of phosphate ore and strong demand. At present, the bull market for China's phosphate ore prices has started, and the long-term upward trend is evident.
The industry believes that China's fertilizer industry's export policy is not predictable. Because the purpose of the government is to ensure the stability of domestic agricultural production and the acceptability of agricultural prices, the government price limit increases the uncertainty of the operation. In the long run, government price control cannot change the pattern of supply and demand in the industry, but it will distort the operating behavior of microscopic entities and increase the uncertainty of operations.
At present, China has become the world's major exporter of phosphate fertilizers, and it is also the main force to replace the decrease in U.S. phosphate fertilizer exports. Therefore, the "China factor", such as China's export tariffs and exports, will have a great impact on the international market.
High oil prices show the advantages of coal chemical industry The core competitiveness of China's coal chemical industry lies in its wide distribution of coal resources, abundant reserves, and relatively large price advantage relative to petroleum, with a large opportunity for substitution. In recent years, domestic coal chemical industry has made significant progress in investment, technology introduction and development, and product range expansion. The main features are the following: First, the products and technologies are mature and the demand is stable. The advantages are reflected in the availability of coal, etc. Resource companies. As a kind of energy transformation and substitution, the technical complexity of coal chemical products (such as methanol and dimethyl ether) is not high, but the investment scale and project approval are more difficult, which ensures the orderliness of the industry competition to some extent. Since the control of coal resources relatively locks up the upstream costs, the profitability of the industry will be guaranteed under the situation of rising oil prices.
Second, some companies have already broken key production technologies, achieved cost advantages, and have ample room for expansion. For example, the listed company Hualu Hengsheng has reached the leading domestic level in key technologies such as coal-water slurry gasification, the industrial chain has been continuously integrated, the product mix is ​​becoming increasingly abundant, and the company's growth trend is obvious.
Third, downstream products have high technical barriers, large added value, and strong profitability. For example, the three-dimensional technology of listed company Shanxi BDO (1.4-butanediol) is the domestic leader in the product chain, and it also has profound accumulation in traditional products such as PVA (polyvinyl alcohol resin) and Eé„„VA (ethylene vinyl acetate). Continuous improvement in downstream product innovation and technological breakthroughs is a typical domestic technology-based enterprise.
Resources become competitive elements of phosphorus chemical industry As the distribution of phosphate rock resources in the world and in China is extremely concentrated, the existing phosphate rock resources are more inclined to dominant enterprises. China's phosphate-rich provinces such as Yunnan, Hubei, and Guizhou have been sparing no effort to integrate local phosphorite resources.
In the context of the continuous integration of multiple links in the midstream and downstream, the mainspring of the phosphorus chemical supply chain was tightened in a circle. However, the phosphorus chemical industry has always been lacking in the corresponding performance of prices. Until 2007, the stability of the phosphorus chemical industry was broken by the prosperity of the phosphate fertilizer, and the industry's boom was rapidly rising. People in the industry believe that since 2007, Phosphorus Chemicals has officially entered a period of higher than expected economic boom. Signature events include: Phosphate fertilizer, yellow phosphorus, phosphorus ore and other prices have risen several times, and efforts have been gradually strengthened; the cycle of the economy It is expected that the industry level is completely consistent with the industry boom even higher than the industry's optimistic expectations.
However, the phosphorus chemical market seems to fall into a lot of "coyote" after the aesthetic fatigue, mainly expressed in the worry about the sustainability of the cycle, how much strength, and whether the company level cooperation. People in the industry believe that the length and height of the business cycle of the phosphorus chemical industry in the future mainly depends on the evolution of many factors at the industry level, such as the government's efforts in energy conservation and emission reduction, and the export of phosphate fertilizers.
Under the background of continuously increasing energy-saving and emission-reduction efforts, the implementation of differential electricity prices will be further strengthened throughout the country. As a typical high-energy-consuming industry, the yellow phosphorus industry will face constraints such as electricity and phosphate ore, and price increases or maintenance will continue. The trend of highs is obvious. <field1>=
The Ministry of Finance recently announced that during the peak season for domestic fertilizer use from April 20 to September 30, 2008, China will impose additional taxes on all fertilizers and some fertilizer raw materials exported from all trade forms, regions, and enterprises based on the current export tax rate. 100% special export tariff. This will increase China's fertilizer export tax rate to 100% to 135%. The picture shows Yuntianhua's annual output of 600,000 tons of diammonium phosphate plant.
In the chemical industry (excluding petroleum and processing, that is, basic chemicals in general, the same below) began to enter a period of significant increase in prosperity, while comprehensive chemical project construction cycle, industry investment data and other factors, the industry estimates, the chemical industry The peak of the boom cycle may come after 2009, and the possibility of continuation of the industry's economy will increase due to the influence of macro-control.
The formation of the current cycle of business cycle Before 2004, the large amount of production capacity formed by the intensive investment in the chemical industry was concentrated in the following two years. From 2004 to 2006, the chemical industry entered a declining stage. It showed that the industry's profit rate continued to decline from the high point of 7.15% at the end of 2004. In 2005 and 2006, the profit rate was only 6.09% and 59% respectively. The total profit growth of the industry was even faster. From 80% in 2003 and 2004 to a rapid drop to 15% in the following two years.
However, even in the downturn phase, the chemical industry still has important positive factors. The outstanding performance is that the industry demand is still strong, and the development speed has not slowed down and absorbed a large amount of surplus production capacity. From 2004 to 2006, the chemical industry's revenue remained at around 30%. Compared with the dramatic changes in total profits, the decline rate was not obvious and the industry's capacity rapidly expanded. While solving the problem of historically excessive investment in rapid development, the decline in profitability of the industry and the government's control over the investment scale have slowed investment growth, and the supply and demand situation of the chemical industry began to change in 2007.
With the rapid promotion of downstream demand, the chemical industry began to usher in a new round of economic cycle in 2007. From January to November 2007, the profit rate of the chemical industry gradually recovered to 6.31%, and the total profit increased by more than 50% year-on-year.
The extension of industry prosperity may be due to the fact that there are many sub-sectors in the basic chemical industry. The actual situation is complex and the overall accurate judgment is more difficult. According to the investment cycle of 2 to 3 years, the current round of industry investment will start to increase from the end of 2007. Although there is no support for the specific investment data of the industry in recent months, according to industry and company level observations, the investment enthusiasm of the major chemical industries and enterprises has not declined. With the increase in profitability and good prospects in the chemical industry, it is believed that overall investment in the industry will not shrink at least. Therefore, as far as the industry as a whole is concerned, the release of new production capacity will put pressure on the industry's earnings in 2009.
At the same time, the possibility of prolonging or fluctuating the economic cycle of the chemical industry also exists. The main reasons are: the downstream demand may exceed expectations, such as the start of biomass energy, the demand for fertilizers and pesticides continues to prosper, the growth rate of domestic investment scale has no significant decline, and energy saving Consumption, environmental protection, security, land, water and other hidden factors will become a long-term constraint; upstream resources will become a potential factor in restricting the release of production capacity, and may cause structural changes in the industry, the trend of integrated development is increasingly significant; the industry survival of the fittest, the government to promote the industry Integration may promote the improvement of industry concentration.
Benefiting from the rapid increase in demand brought about by the recent agricultural commodity bull market, major fertilizers and agricultural demand have risen rapidly in the short term. Due to the low short-term supply flexibility, it caused a strong rise in the prices of all related products.
Prices in 2007 soared to record a new record for fertilizers and pesticides for more than a decade. The urea Baltic FOB price has increased from US$200/ton in mid-2006 to the current RMB 391/ton, an increase of 95%. The potassium chloride price of potassium chloride in Canada rose from about 175 US dollars per ton in 2006 to the current 413 USdollars per ton, an increase of 136%. The international diammonium price has also soared from the long-term equilibrium price of around US$250/ton to US$1,000/ton, an increase of 300%. Glyphosate was less than 30,000 yuan/ton in 2006 and currently is 95,000 yuan/ton, up more than 200%.
As the world's potash fertilizer demand grows faster than nitrogen and phosphate fertilizers, and the global potash fertilizer resources and supply are extremely concentrated, the remaining production capacity is concentrated on individual companies, and the price increase trend is more obvious. As a large importer of potash fertilizer, China has long relied on imported resources to meet domestic demand and is a passive recipient of international prices.
The growth of nitrogen fertilizer production capacity will accelerate the production. The urea industry will increase its cost, accelerate the expansion of production capacity, and have a complex structure. As industry costs and gridlines are getting higher and higher, non-compliance is in a difficult position. In addition, electricity, transportation and other prices have increased pressure, natural gas suppliers such as PetroChina, Sinopec gradually took a favorable position in the game, the natural gas rising trend is clear, and the gross profit margin of natural gas-based urea companies continues to shrink. In 2007, domestic urea production was 24,857,000 tons (constrained), a year-on-year increase of 11.5%, and domestic urea production capacity was further enlarged. The increase in profitability of the industry in 2007 has increased the driving force for the expansion of some enterprises, and the speed of construction of new projects has also accelerated. After 2008, new capacity in the urea industry will not be significantly reduced.
It should be noted that the market cannot ignore the complicated structural features of China's urea (even nitrogen fertilizer) industry. China's nitrogenous fertilizer industry has many levels. Various technologies, routes, and scales coexist, and the costs of different companies vary widely. With the close of price and cost, high-cost devices will have to reduce the operating rate or even completely stop production. The sensitivity of the supply of the industry to the price increases, the cost-leading enterprises are protected, and the small and medium-sized urea production enterprises with high energy consumption and technological backwardness may be Losses continue, and some will even be eliminated.
The value of phosphate fertilizer resources highlights the cumulative increase in phosphate fertilizer prices completed in 2007 for several years. This is the release of accumulated energy from the continuous integration within the petrochemical industry in the past few years. The gradual reduction in the elasticity of supply in the industry has evolved into a explosive price surge in the face of unexpected demand.
People in the industry believe that in the future, the phosphate fertilizer industry will evolve around major factors such as international demand, China's export policies, and raw materials (sulfur, phosphorite, etc.). In the world, the demand for phosphate fertilizers is sustainable in the medium term, and the global phosphate fertilizer plant utilization rate continues to increase, supply and demand are more intense, and the industry boom will operate at a high level.
With respect to raw materials, the contradiction between the supply and demand of sulfur will not be substantially relieved until 2009, and domestic phosphate fertilizer companies will still rely mainly on imported sulfur and passively accept pricing in the international market. In the long term, due to the greater resource value of phosphate ore, the international market pricing is more efficient, reflecting the dual impact of increased concentration of phosphate ore and strong demand. At present, the bull market for China's phosphate ore prices has started, and the long-term upward trend is evident.
The industry believes that China's fertilizer industry's export policy is not predictable. Because the purpose of the government is to ensure the stability of domestic agricultural production and the acceptability of agricultural prices, the government price limit increases the uncertainty of the operation. In the long run, government price control cannot change the pattern of supply and demand in the industry, but it will distort the operating behavior of microscopic entities and increase the uncertainty of operations.
At present, China has become the world's major exporter of phosphate fertilizers, and it is also the main force to replace the decrease in U.S. phosphate fertilizer exports. Therefore, the "China factor", such as China's export tariffs and exports, will have a great impact on the international market.
High oil prices show the advantages of coal chemical industry The core competitiveness of China's coal chemical industry lies in its wide distribution of coal resources, abundant reserves, and relatively large price advantage relative to petroleum, with a large opportunity for substitution. In recent years, domestic coal chemical industry has made significant progress in investment, technology introduction and development, and product range expansion. The main features are the following: First, the products and technologies are mature and the demand is stable. The advantages are reflected in the availability of coal, etc. Resource companies. As a kind of energy transformation and substitution, the technical complexity of coal chemical products (such as methanol and dimethyl ether) is not high, but the investment scale and project approval are more difficult, which ensures the orderliness of the industry competition to some extent. Since the control of coal resources relatively locks up the upstream costs, the profitability of the industry will be guaranteed under the situation of rising oil prices.
Second, some companies have already broken key production technologies, achieved cost advantages, and have ample room for expansion. For example, the listed company Hualu Hengsheng has reached the leading domestic level in key technologies such as coal-water slurry gasification, the industrial chain has been continuously integrated, the product mix is ​​becoming increasingly abundant, and the company's growth trend is obvious.
Third, downstream products have high technical barriers, large added value, and strong profitability. For example, the three-dimensional technology of listed company Shanxi BDO (1.4-butanediol) is the domestic leader in the product chain, and it also has profound accumulation in traditional products such as PVA (polyvinyl alcohol resin) and Eé„„VA (ethylene vinyl acetate). Continuous improvement in downstream product innovation and technological breakthroughs is a typical domestic technology-based enterprise.
Resources become competitive elements of phosphorus chemical industry As the distribution of phosphate rock resources in the world and in China is extremely concentrated, the existing phosphate rock resources are more inclined to dominant enterprises. China's phosphate-rich provinces such as Yunnan, Hubei, and Guizhou have been sparing no effort to integrate local phosphorite resources.
In the context of the continuous integration of multiple links in the midstream and downstream, the mainspring of the phosphorus chemical supply chain was tightened in a circle. However, the phosphorus chemical industry has always been lacking in the corresponding performance of prices. Until 2007, the stability of the phosphorus chemical industry was broken by the prosperity of the phosphate fertilizer, and the industry's boom was rapidly rising. People in the industry believe that since 2007, Phosphorus Chemicals has officially entered a period of higher than expected economic boom. Signature events include: Phosphate fertilizer, yellow phosphorus, phosphorus ore and other prices have risen several times, and efforts have been gradually strengthened; the cycle of the economy It is expected that the industry level is completely consistent with the industry boom even higher than the industry's optimistic expectations.
However, the phosphorus chemical market seems to fall into a lot of "coyote" after the aesthetic fatigue, mainly expressed in the worry about the sustainability of the cycle, how much strength, and whether the company level cooperation. People in the industry believe that the length and height of the business cycle of the phosphorus chemical industry in the future mainly depends on the evolution of many factors at the industry level, such as the government's efforts in energy conservation and emission reduction, and the export of phosphate fertilizers.
Under the background of continuously increasing energy-saving and emission-reduction efforts, the implementation of differential electricity prices will be further strengthened throughout the country. As a typical high-energy-consuming industry, the yellow phosphorus industry will face constraints such as electricity and phosphate ore, and price increases or maintenance will continue. The trend of highs is obvious.
The Ministry of Finance recently announced that during the peak season for domestic fertilizer use from April 20 to September 30, 2008, China will impose additional taxes on all fertilizers and some fertilizer raw materials exported from all trade forms, regions, and enterprises based on the current export tax rate. 100% special export tariff. This will increase China's fertilizer export tax rate to 100% to 135%. The picture shows Yuntianhua's annual output of 600,000 tons of diammonium phosphate plant.
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