Recently, OPEC production agreement entered into force for more than and 10 days, from the current members of the OPEC implementation of production process, overall good. Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, four countries in the implementation of production agreement, including Saudi Arabia since January crude oil production decline of at least 486 thousand barrels / day to 10 million 58 thousand tons / day. Angola, Algeria has notified the oil companies to cut oil production to meet production commitments. Venezuela has implemented 95 thousand barrels / day of commitment. Although last December Iraqi exports hit 3 million 510 thousand barrels a day of record highs, but the country starts from the beginning of January this year has been cut 160 thousand barrels / day, which exceeds the commitment to decrease rate of 210 thousand / day 3/4. At the same time, as the main representative of non OPEC production, Russia’s crude oil production from October 2016 11 million 250 thousand barrels a day in the post Soviet era record a decrease of about 130 thousand barrels a day, over the completion of this month to cut at least 50 thousand barrels / day of the initial target.

Overall, the producers now implement the basic production in place, even if the oil producing countries according to the agreement cut finish only 80%, the crude oil market will be in early 2017 to rebalance. The medium term, the focus of the operation of crude oil is expected in 55 to 60 U.S. dollars / barrel.

Since mid December 2016, PTA oscillation finishing. Before the Spring Festival is expected to continue to maintain the rate of about PTA oscillation pattern, the proposed bargain layout, promising holiday rally.

PX in the darkness before the dawn

The PX operation is relatively stable, PX- naphtha spreads is currently stable at 350 U.S. dollars / ton, is low since 2016, mainly with the recent strong upstream naphtha, and India trust 2 million 200 thousand tons PX device to open the. But from the beginning of the end of March, the Asian PX device will enter the maintenance area, at present, the two quarter Asian PX volume will overhaul in about 8 million 200 thousand tons, accounting for 19% of the total capacity of Asian PX. In 2015 and 2016 two quarter volume is only 4 million 500 thousand tons of maintenance. Excessive maintenance of PX device will make PX a substantial tightening of supply. On the other hand, 900 thousand tons of PTA plant in Far East 1 million 400 thousand tons and is expected to drive Peng Wei in April to restart, and the raw material stocking can aggravate the extent of demand PX. Look after the Spring Festival PX end PTA given the cost of support.

The supply pressure is PTA

January PTA equipment maintenance is not much, is expected in January PTA total inventory of 200 thousand tons, the overall poor performance of supply and demand. But recently, you can clearly see, as long as the PTA fell, have participated in polyester plant replenishment. In addition, recent mainstream suppliers are actively repurchase warehouse and spot price support still exists. According to the current maintenance announcement is expected, 2 million 200 thousand tons itsumori device maintenance plan in Ningbo in early February this year during the Spring Festival, refer to the downstream polyester overhaul, PTA market 1 – March inventory accumulation pressure is not great. From three sets of stock device production expected, Xianglu no clear date of resumption of production on 2017, half out of the possibility is low, and the Far East and Peng Wei have a stable output or to wait until after May, does not exclude the possible delays, that is to say, at least until May, the supply pressure is not PTA.

From the operation of the downstream polyester, polyester benefits in January will continue to maintain the good momentum, inventory level has to rise, but the absolute inventory is still low, the average inventory days over the same period last year dropped by half. According to statistics, during the Spring Festival this year to overhaul the polyester production capacity of around 5 million 500 thousand tons, compared to the same period last year fell 21%, which related to the good profit. From the planned new plant put into operation, the first quarter of 2017, is expected to three sets of a total of 1 million 150 thousand tons of production capacity is expected to put in the bottle, incremental demand will slow down the PTA storage capacity on the pressure, but also put more on the production capacity of polyester at. Although from the beginning of next week, polyester factory continue to enter the Spring Festival holiday mode, demand gradually come to light, but this year from the new device shutdown efforts and later put process, we are still optimistic about the holiday prices stimulating downstream demand for PTA.

In short, PTA will maintain the oscillation method.

With the development of new products to increase investment, in 25 years from 1990 to 2014, the new effective components of different categories of pesticides listed quantity decreased (Figure 4). Among them, in 1990 to 1999 10 years, about 130 new active ingredients listed, i.e., there are about 13 new active ingredients listed every year; in 2000 – 2009 years, about 100 new active ingredients listed, i.e., there are about 10 new active ingredients listed in the 2010 – year; in 2014 5, about 30 new active ingredients listed, i.e., there are about 6 new active ingredients listed every year. Thus, the development of a new effective component is more and more difficult.

Wang summed up the 6 factors of pesticide research and development costs:

The further integration of industry, investment companies to reduce new product creation. Because of regulatory requirements more stringent, into new products listed before the higher costs, many of the original can be listed varieties are not listed, which also contributed to the merger and reorganization of enterprises, to increase investment; at the same time, the company’s investment in R & D created more cautious.

The R & D investment more seeds and transgenic technology. Relatively easy to obtain transgenic technology achievements, and some test cost is also very low pesticide.

The effective components of development costs increased significantly.

The registration of the regulatory environment is more and more strict.

The attention of biological solutions. In recent years, such as Bayer spent great effort to the development of biological pesticide.

In addition to the impact of the global economic and agricultural commodity prices on the market, transgenic technology promotion and resistance to pests and also affect the development of pesticide market, especially the market impact of herbicides and pesticides. Since 1996 the first genetically modified (GM) crops grown commercially since the rapid development of GM seeds, the average annual growth rate of about 10%. and its development speed is obviously faster than the three kinds of pesticides (Figure 2).

In the 25 years from 1991 to 2015, the basic fungicides showed steady growth, is the fastest growing type of pesticide products. Followed by pesticides, herbicides and fast development in the last row.

Although the share of the herbicide in the global market has declined, but still occupy the first place, and the global market plays an important role. In 2009 – 2014 years, compound annual growth rate of the global market of herbicide 4.9%., ALS- (+8.4%), imidazolones ALS- other classes (+13.7%), PPO- two phenyl ether (+6.3%), PPO- (+24.9%) and other classes of HPPD inhibitors (+12.4%) and phenoxy carboxylic acid (+6.5%) compound the annual growth rate will outperform the overall market herbicide (Table 1). The growth of these products triggered a global concern.

According to Wang introduced, imidazolinone herbicide mainly due to the growth of Americas non transgenic Clearfield crops, these crops can tolerate imidazolinone herbicides. ALS- other herbicides increased mainly because of some sulfonamide herbicides Dow development, in recent years the rapid growth of these products, such as florasulam, pyroxsulam etc.. PPO- two benzene ether herbicides increase mainly due to the development and spread of resistant weeds, especially for control of glyphosate resistant weeds. Wang pointed out that HPPD inhibiting herbicides is a kind of hot products, its resistance to appear less, while there are a number of new products in the market, so that the rapid growth of products. Phenoxyacid herbicide is a kind of very old herbicide, but its nearly 5 years of rapid growth, and is expected in the next 5 years is still growing rapidly.

2 R & D costs increase, significantly reduces the number of new products listed

Although the new product market is more and more difficult, research and development costs increased year by year, but the pesticide industry has never stopped the pace of innovation. In 2001 – 2014 years, genetically modified seeds and traits of the development costs increased rapidly, while for pesticide research and development costs of rapid growth, but the growth rate is less than the former (Figure 3).

In January 1, 2017, OPEC and non OPEC production agreement, will cut nearly 1 million 800 thousand barrels, resulting in international oil prices for the first time in the year soared, presumably, the international oil price movements and solvent market is proportional to the collective upward trend, according to the measured data to display the HC Chemical Network, acetic ester, ethylene glycol, methanol, styrene and other goods a rebound in the overall market downturn.

This price increase does not influence the market of raw materials, in addition to price factors, related factors, environmental protection and production and utilization device for raw materials market.

methanol

In 2016 the domestic methanol market upward trend. At the beginning of the year by the central bank RRR, monetary easing and other factors support, methanol market continued to rise, but with the supply pressure rise, the market remain weak shocks.

In 2017, methanol market continued weak to run, the afternoon of January 4th, Jiangyin, Changzhou, Zhangjiagang and Nantong decline in methanol market, Jiangyin Changzhou spot sold 3040-3060 yuan / ton from mentioning Nanjing Xiaochan negotiations in 3100-3130 yuan / ton since, Zhangjiagang spot sold 3050-3060 yuan / ton from Nantong area; small spot reference negotiations in 3100-3130 yuan since the lift / ton. Because the supply port or increased slightly and production of methanol plant continued losses, the expected short-term domestic methanol prices vulnerable to run.

styrene

By the soaring crude oil market of styrene, a time is difficult to support, still continue the downward trend. While the downstream load of ABS plant production, with the Spring Festival holidays, the downstream demand is not high mood, weak consolidation. Therefore, for styrene limited support, today styrene market decline, on behalf of the enterprise Tianjin Dagu, Guangzhou petrochemical, Maoming petrochemical, drop in between 200-300 yuan / ton, prices were 9850 and 9700 respectively, 9800 yuan / ton.

Chemical (OX) 2016 December oxylene prices downward trend, OX month average price of 7225 yuan / ton, compared with the first month price 7655 yuan / ton fell 5.62%, rose 46.11%.

Market analysis:

Products: decline in December the domestic market price trend of o-xylene, dragon aromatic device is still in repair, Luoyang Petrochemical overhaul, Jinling Petrochemical equipment normal operation operation, normal operation of Zhenhai Refinery device, Yangzi petrochemical equipment normal, domestic market operating rate of benzene into more than 4, the phthalate on spot supply is adequate, benzene market prices fell sharply. As the mainstream of o-xylene negotiations at the end of the market in East China fell to 7800-7900 yuan / ton, the port inventory in East China by the end of last less than 20 thousand tons, the abundant phthalate phthalate turnover scarce, market prices decline.

The industrial chain: December crude oil prices rose sharply, as of the end of WTI for $53.77 a barrel, the recent crude oil prices, downstream petrochemical products have a certain cost, but the phthalate market due to the abundant supply of goods to go bad market price decline. December domestic phthalic anhydride market prices sharply lower, as of the end of phthalic anhydride price of 7833.33 yuan / ton, a decline of 9.06%, the domestic market operating rate of 4 phthalic anhydride, phthalic anhydride market prices fell sharply in December, plasticizer industry prices fell to a certain market upstream phthalate phthalate bad, the market price decline.

Industry: recent plasticizer industry downturn in December, the business turnover is limited, the market price decline Fu phthalate.

Market forecast:

Recently the phthalic anhydride market prices fell, and the oil market prices rangebound, is expected in January the phthalate market price or will continue to fall, the price of 7000 yuan / ton.