Abstract: Recently, the listed companies Chitianhua announced yesterday, is expected 2016 loss of 300 million to 360 million yuan. Notice that, in 2016 the company chemical business by the main raw materials (coal) the dual impact of rising costs and urea, methanol prices continued to slump, operating profit decreased significantly. At the same time, the company intends to make provision for impairment of gas head urea production device and its related assets involved. See details []

The integration of automotive battery industry coming high quality battery capacity is not excessive

Abstract: the end of November, the Ministry issued the “automotive battery industry standard conditions (2017)” (Draft) (hereinafter referred to as the draft) show that the lithium ion power battery monomer enterprises annual production capacity from the previous “not less than 200 million watts” to “not less than 8 billion watts, about 40 times higher. See details []

In 2017 the supply and demand of the existence of the time difference of methanol, methanol or after the first strong weak

“This year the overall profitability of the coal chemical industry is also good, although prices have great impact on the cost of coal chemical products, but prices also rose sharply.” LUZHENG futures researcher Pu Chengzhu said. A central China coal chemical industry sources told reporters that this year the domestic coal chemical industry operating situation is generally optimistic, but except for fertilizer production.

“Domestic urea industry overall overcapacity, prices continue to decline, some of the old urea enterprises because of technical problems, the production cost is relatively high, more serious loss. However, this year the urea market better than last year.” Pu Chengzhu said.

The other coal chemical products of methanol has become the focus of the market. “After entering the fourth quarter, the domestic methanol market continued good news, methanol imports to Hong Kong to fall, demand continued stable olefin. Changzhou food and Jiangsu sailboat two sets of olefin plant put into operation before the demand, the overall market is facing low inventory, supply shortage situation.” CITIC futures researcher Shen Liping told the methanol futures Daily reporter said commodities rose collective devaluation, increased transportation costs and crude oil prices strong, are constantly pushing up the price of methanol.

It is worth noting that, in December 23rd, the Tariff Commission of the State Council issued the “notice” on the 2017 tariff adjustment plan, decided to cancel the export tariffs on fertilizer and fertilizer, and appropriate to reduce the three yuan fertilizer export tariffs. The industry believes that in 2016 China’s exports of urea fell to the freezing point in recent years, the abolition of tariffs for domestic market and export bring some support, but in the long run, it is difficult to change the overcapacity and loss of business situation.

In this regard, the industry calls for improvement of coal chemical industry to accelerate the urea futures, futures market, to help companies use futures tools service production and operation. As the energy and chemical species, if urea and methanol futures listed, among other varieties will have more opportunities for arbitrage.

High international oil prices in a narrow range. Last week, Brent futures settlement price of $54.99 / barrel, an increase of $0.08 / barrel, or 0.15%, the range of 54.46-55.35 U.S. dollars / barrel. Last week, WTI futures settlement price of $52.96 / barrel, an increase of $1.03 / barrel, or 1.99%, the range of 52.49-53.3 U.S. dollars / barrel. The Russian ambassador to Turkey was assassinated, German truck butt event brought geopolitical risk; OPEC and Russia have said it will implement cuts lead to optimistic market sentiment, maintain prices at a higher position. But for the United States shale oil production and crude oil exports in Libya may be a substantial increase in concerns, but also to suppress the formation of oil prices, so the overall maintenance of a narrow range of oil prices.

OPEC confidence in the market will become the main factors affecting oil prices fluctuations. OPEC reached a reduction of 1 million 200 thousand barrels / day agreement, the actual implementation of the degree of reduction has become the focus of market attention. Market volatility has become the main factor affecting oil prices. Saudi Arabia, Iran, Iraq, and non OPEC major oil producing countries, Russia, have said they will strictly enforce the agreement, and some countries have notified customers last week that it will reduce supply. OPEC market for the real implementation of the confidence of production cuts, oil prices last week to support relatively high. In January 1st next year will begin to cut production, the country will reduce the output of the relevant measures to reduce output volatility will become the main factors affecting the volatility of oil prices.
U.S. shale oil production has become a major factor in oil prices. The United States crude oil production from the beginning of 9 million 230 thousand barrels a day, reduced to a year low of 8 million 420 thousand barrels a day, as oil prices rise, the number of active drilling rig, at the end of the year to increase production to 8 million 780 thousand barrels / day, the annual output of V font, highlighting the shale oil production for high oil prices elasticity. OPEC frozen postpartum, hedging shale oil manufacturers jumped $55 in oil prices hit the long-term price of crude oil, crude oil futures term structure more smooth, the current market expectations of shale oil increment is limited, will not affect the production effects, whether the future of shale oil and the actual yield rate will exceed expectations, will become one of the important factors affecting the oil price fluctuation. Domestic petrochemical market: polyester industry chain spreads continue to expand, acrylic acid and ester industry boom high.

Petrochemical products prices rose three last week (+11.5%), butadiene acrylate (+8.78%), butadiene rubber (8.45%), spreads up the top three for butadiene – liquefied gas (up 15.19%), propylene – naphtha (up 10.56%), caprolactam benzene (up 8.71%).
Raw material to support the acrylic industry continues to rise. Acrylic acid market continued to rise in the domestic market to support the acrylic acid, the cost of equipment manufacturers started under pressure, the market spot tension. Acrylic week average price increase 500 yuan / ton, butyl acrylate week average price increase 500 yuan / ton, acrylic acid acrylic spreads by 4310 yuan / ton up to 4681/ tons, up 6.88% over the past three months, acrylic acid acrylic spreads were 757 yuan, 1902 yuan, 4042 yuan, or larger, industry into the high boom interval.

Decline in the cost of polyester industry chain spreads continue to expand. The market offer stabilized after a gravity drop, PTA prices declined slightly, the overall market weak finishing MEG. The decline in costs led to the continued spread of polyester industry chain spreads, polyester -PTA& ethylene glycol spreads around +284 yuan / ton (6.56%). Polyester -PTA& ethylene glycol spreads 9-12 month average price of 2933343538384203 yuan, the price rose nearly $1300. PTA spreads over the same period the average price of 450 yuan, $448, $573, 812 yuan, the price difference rose by $362, the industry boom up.

Due to lower barriers to entry, fertilizer industry overcapacity, industry competition. This year, the State Environmental Protection intensified, more stringent for fertilizer production and use restrictions, coupled with the use of chemical fertilizers and pesticides affect the amount of zero growth, soil remediation action policy, the background to capacity in the fertilizer industry, some low-end enterprises will be eliminated the fear of fertilizer or facing transformation and upgrading.

Fertilizer enterprises increased production costs, sales decline, profit margins, increasing pressure to survive. The relevant preferential policies of national fertilizer canceled, such as coal and natural gas urea raw material prices, rising national transport restrictions on fertilizer increase, the cost of transportation, 10 urea and diammonium phosphate production enterprises operating at a loss in most months. The compound fertilizer industry profit is higher than the number of elemental fertilizer, compound fertilizer production increased this year, the market competition is more intense, the price war can hardly be avoided. At the same time, the decline in agricultural prices, resulting in farmers will be willing to reduce fertilizer fertilizer. “Winter”, some enterprises and agricultural fertilizer dealers change cooperation mode and operation mode, heating.

In 2016, a number of preferential policies have been canceled in the chemical fertilizer industry, including preferential tariff, preferential price of natural gas, preferential transport price and so on.
In April 2015, the national development and Reform Commission issued “on the lower coal-fired electricity price and commercial and industrial electricity prices notice” requirement, the phasing out of chemical fertilizer production electricity price concessions, perform the same categories business electricity prices, in April 20, 2016 the national no longer keep fertilizer production preferential tariff. October 2016, Taiyuan, Zhengzhou, Urumqi, Xi’an and Hohhot Railway Bureau to fully adjust the price of goods transport, part of the railway bureau to cancel the preferential policies of fertilizer.

In November, the national development and Reform Commission issued “on the fertilizer gas prices in the market-oriented reform of the notice”, decided in November 10th to the full liberalization of fertilizer gas prices, while encouraging chemical fertilizers into oil and natural gas trading center trading platform with gas price formation, through market transactions, the price transparency. In addition, in 2015 the Ministry of Finance decided to resume the collection of fertilizer VAT, from September 1, 2015 to June 30, 2016, sales of value-added tax general taxpayer inventory of fertilizers, allowed to choose to follow the simple calculation according to the 3% levy VAT rate. At present, the transition period expires, the fertilizer began to levy 13% vat.