The overall supply and demand of potassium sulfate in China has not been significantly improved. The supply of potassium sulfate is relatively sufficient. Mannheim’s 50% powder is generally shipped, but the grain and 52% water-soluble potassium sulfate are in good condition. The price is relatively high. The quotation of potassium sulfate is more than 2900-3000 yuan/ton. The turnover is mainly based on the order quantity, and the supply of potassium sulfate in most factories is slightly tight.

Resource-based potassium sulfate plant production is normal. The price of 52% Rok powder is more than 2700-2800 yuan/ton. The price span is large, and the price is mostly negotiated according to the order quantity.

Qinghai water and salt are stable for the time being. The arrival price of 50% powder is between 2550 yuan and 2580 yuan per ton. There are certain spot sales in various regions, and the supply is still acceptable.

The market for potassium sulfate has steadily advanced. Before the single implementation of potassium sulfate fertilizer in spring tillage, the purchasing link of new fertilizer became weaker. Local environmental safety inspection is normalized, and now the start-up of the Mannheim plant in Hebei is conservative; 50% of the mainstream powder from Hebei enterprises quoted 2850 yuan/ton, 52% of the powder/particle from the factory quoted 2950-3000 yuan/ton, with a single transaction as the main consideration.

Recently, urea quotation in Shandong and Hebei, the main producing areas, has been declining continuously. At present, the price of urea storage in Linyi, Shandong Province, varies from 2030 to 2050 yuan (ton price, the same below). Enterprises have yet to issue orders to implement. However, in recent years, there is less demand for Industry and agriculture, heavy downstream wait-and-see mentality, low purchasing intention, and the enthusiasm of traders to take goods again in the near future is relatively low, and more inventory is cleared.

Recently urea has been “out of gas”, but the price of Monoammonium is still rising. At present, the actual acceptance of 55% of powdered ammonium in Hubei has increased from 2000-2030 yuan to 2050-2100 yuan in the early period, while the actual acceptance of 58% of powdered ammonium in small factories has risen slightly to 1980-1990 yuan, from 2100 yuan in the early period to 2130 yuan in Hubei large factories, and has continued to rise to 2150 yuan in the near future, with an overall increase of 20-50 yuan. Anhui large plant 55% ammonium powder recently suspended orders, 55% ammonium powder factory quoted price in 2150 yuan, Sichuan large plant 55% ammonium powder factory quoted price after rising stability in 2050 yuan, not to accept orders for the time being.

Some insiders are confident that ammonium will continue to rise. Some insiders believe that although the price of Monoammonium is still rising, it is still too early for high phosphorus fertilizer. With the gradual decrease of demand, the market of Monoammonium is not expected. The following is a brief analysis of the favorable factors and the negative factors.

Good factors:

Restrictions on orders are pending. Recently, ammonium enterprises have not only consumed their stocks, but also received some orders. It is known that the pending orders can probably be executed until mid-early May. Recently, there is a shortage of shipments. In the active shipment of enterprises, some large factories in Hubei have issued pending orders and suspended receiving orders. Large factories in Sichuan, Anhui and other places have not yet received orders.

Start-up low, low inventory. At present, the overall start-up rate of Monoammonium is still around 50%, and only 50% of Monoammonium in the main producing area of Hubei Province. Large factories in Hubei, Sichuan and other places limit production mainly. Individual start-ups have not reached half-open. Henan and other enterprises stop production for various reasons, and some have to wait until the end of May to resume production. The overall inventory of enterprises is low, and some enterprises have basically consumed their inventory. At present, they sell with production.

Prices of raw materials have risen. Recently, the price of liquid ammonia has risen sharply. The reduction of liquid ammonia in Anhui, Henan and Yunnan has led to the shortage and price increase in Hubei and other places. At present, the acceptance of liquid ammonia in Hubei is about 3250 yuan. It is known that the price of phosphate ore may also rise, mainly due to the good demand for ammonium in the near future.

Short-term demand remains. Recently, the actual transaction of Monoammonium continues to rise slightly. Although the new price transaction is temporarily less, the demand still exists in the short term, the new single transaction of enterprises is still acceptable, and some downstream compound fertilizer enterprises still have a small amount of purchasing monoammonium plan.

The negative factors:

The demand for high phosphorus fertilizer is still early. The demand for high phosphorus fertilizer in autumn should wait until July and August, because ammonium enterprises consume stocks, resulting in large purchasing volume in the near future and early consumption of demand in compound fertilizer enterprises. This may slow down the demand for ammonium in May and June. The industry believes that the specific situation depends on the market situation at the end of May and the beginning of June, but at present, the demand in the later period should slow down.

Raw material sulfur callback. At the beginning of April, the price of sulphur rose to more than 1000 yuan, but recently due to the influence of external market and the slowdown of domestic demand, the price of sulphur dropped to less than 1000 yuan. At present, the price of granular sulphur in Yangtze River Port and Fangcheng Port has been lowered to around 985 yuan. The price of Puguang Sulfur Wanzhou Port and Dazhou Factory has also been revised back to 980 yuan and 860 yuan, respectively.

Transportation was blocked in some areas. The construction of roads in Guangyuan area of Sichuan has led to obstruction of transportation. The areas affected include Henan, Hebei, Shanxi, Shandong, Shaanxi and other areas in Northwest China. The freight of ammonium monoxide has increased. For example, the freight of Yuncheng City in Sichuan Province increased from 120 yuan in the early period to 165 yuan in the near future, and the freight of Shijiazhuang City in Sichuan Province increased from 180 yuan to 220 yuan in the near future. If the price of Shijiazhuang Railway Station remains unchanged, the freight will rise. The price of ammonium has been reduced in disguised form, which has restrained the price increase of monoammonium.

To sum up, in the short term, the demand for ammonium is released ahead of schedule, and the demand is slowing down gradually in the near future. It is expected that ammonium may have a risk of callback in May and June. However, depending on the market situation at the end of May and the beginning of June, it is not excluded that the price of ammonium will continue to rise.

Goldman Sachs and Barclays warned investors that sanctions would not have a significant impact on oil prices in the long run, as international oil prices jumped as the United States declared an end to its exemption from Iranian crude oil.

In its latest research, Goldman Sachs said that although the U.S. waiver ended much more abruptly than expected, it would not have a significant impact on oil prices in the long run. Goldman Sachs pointed out in its research paper that Iran’s oil production would be reduced by 900,000 barrels a day, while the global available idle capacity of 2 million barrels would be increased further later this year.

It believes that oil prices will continue to fall in 2020 as the supply situation of crude oil market improves next year and there are doubts whether OPEC and non-OPEC organizations will continue to comply with the cut-off agreement after June. It maintained the basic range of Brent crude oil prices for the second quarter of 2019 at a price target of $70-75 per barrel.

Barclays also expressed a similar view that Saudi Arabia and other major oil producers would fill the supply shortage. But it predicts that Saudi Arabia’s adjustment reaction may be slower than last year.

On Monday, April 22, the White House officially issued a statement saying Trump decided not to update Iran’s crude oil exemption policy, which expired in May, in order to reduce Iran’s crude oil exports to zero. The statement mentioned that the three major energy producers, the United States, Saudi Arabia and the United Arab Emirates, have agreed to take timely action to ensure global crude oil demand as Iran’s oil withdraws from the market.

Saudi energy minister Falkh said in a statement after the announcement of a major White House decision that Saudi Arabia would coordinate with other oil producers to ensure adequate supply of crude oil to consumers, while ensuring that the global crude oil market would not be imbalanced:

“In the next few weeks, Saudi Arabia will closely communicate with other oil producers and core oil consumers to ensure a fully balanced and stable crude oil market, for the common interests of both oil producers and consumers, and for the stability of the global economy.”

Saudi Arabia will assess the impact of U.S. decision-making on the oil market before increasing production, while Saudi Arabia and the United Arab Emirates can rapidly increase production by 1.5 million barrels a day in a “short time”, Bloomberg quoted people familiar with the matter who asked for anonymity as saying.

The data show that Saudi Arabia, as OPEC’s largest oil producer, could produce 982,000 barrels per day in March and increase production by another 1 million barrels per day; the UAE could increase production from the current 3.45 million barrels per day to 3.5 million barrels per day. According to Bloomberg, Iran’s crude oil exports in the first two weeks of April were 1.1 million barrels a day, making up for Iran’s oil losses on behalf of Saudi Arabia and the United Arab Emirates.

This week’s market review:

This week, driven by weak demand and overall weakness of the chemical sector, methanol futures prices first restrained and then rose, with a sharp drop in the focus. As of Friday’s close, MA1909 closed at 2439 yuan/ton, down 91 yuan/ton or 3.6 percent a week. The spot methanol in Jiangsu is 2 340 yuan/ton, with a weekly decline of 90 yuan/ton or 3.7%. The base difference of MA1909 is -99 yuan/ton (+1).

Fundamental analysis:

On the supply side, because the overhaul of methanol plant in Northwest China involves more capacity than compound production, the start-up load in Northwest China is 74.81%, and the ring ratio is decreased by 1.11%. In addition, some units in Shandong, Liaoning and other areas resumed operation, resulting in a slight increase in methanol start-up load throughout the country. The start-up load of domestic methanol unit is 66.58%, which is 0.11% higher than that of the previous year. For domestic plants, the 1 million ton/year methanol plant in Jiutai, Inner Mongolia, stopped for overhaul on April 8 and is scheduled to restart next week. Inner Mongolia Rongxin 900,000 tons/ton plant stopped for 30 days on April 7. New Oda Banner, Inner Mongolia, Phase II 600,000 tons/year plant is scheduled to stop for 15 days on April 10. Inner Mongolia Yigao 300,000 tons/year plant is scheduled to start parking overhaul for 20 days on April 10. The 300,000 tons/year energy plant in Northwest Inner Mongolia is scheduled to be repaired on April 20. The start-up time of 800,000 tons/year methanol plant in Guilu, Qinghai was delayed. As for foreign installations, the commissioning and operation of Iranian Kaveh 2.3 million tons new installations have been unstable since the middle and late February, and are now in the process of parking maintenance. During the shutdown and maintenance of Marjan’s 1.65 million-ton methanol plant in Iran, another methanol plant is in stable operation. It is planned to stop for a short period of 7-10 days, and its contracted cargo is centrally queued for shipment. Inventories in coastal ports have declined this week, especially in Fujian and Guangdong. Overall coastal methanol stocks fell by 43,000 tons to 945,000 tons compared with the previous week. The methanol circulatable supply in coastal areas is estimated to be around 265,000 tons, which is more stable than the previous week. It is estimated that the arrival volume of Chinese imports will be 384,900-390,000 tons in the next two weeks, most of which will be concentrated in Jiangsu and Zhejiang ports.

In terms of demand, the overall start-up load declined due to the increase of an olefin load in Shandong Province and the shutdown of the MTO plant in Qinghai Salt Lake. The average start-up load of domestic coal (methanol) olefin plant this week was 85.10%, down 0.4 percentage points from last week. Traditional demand, affected by safety inspection, some formaldehyde and dimethyl ether plants have been restored, but the overall progress is still slow. Acetic acid can reduce the shutdown load of some units.

Conclusion and suggestions for operation:

Domestic methanol market trend differentiation. Mainland market is still affected by environmental safety inspections, downstream factories are slow to resume work, and overall demand is weak. Later, with the gradual end of maintenance in Northwest China, the pressure of market supply and demand may increase. On the port side, port inventory continued to decline this week, but with the gradual resumption of overseas methanol overhaul facilities, the arrival of cargo to port in the future will concentrate or drag down the progress of depot at the port. Major MA1909 once fell below the lower edge of the oscillation zone and was temporarily supported above 2400. Fundamentals are difficult to improve in the short term. Short-term prices are expected to remain low and volatile, with a reference range of 2400-2600.

Moscow reported on April 18 that the total output of high density polyethylene (HDPE) in Russia in the first quarter was 236,300 tons, an increase of 0.4% year on year, according to the ScanPlast report of MRC.

Only two of the four producers increased production, namely the Russian Natural Gas Industry Co., Ltd. and the Russian chemical company Kazanorgsintez.

In March, the output of HDPE increased from 71,500 tons a month ago to 79,300 tons.

Stavrolen, Russia’s main polyolefin producer, increased capacity utilization after a brief maintenance in February.

Kazanorgsintez’s total HDPE production in March remained almost at February’s level, at 428,000 tons. From January to March, the total output of HDPE in Kashan factory reached 137,300 tons, an increase of 2.2% compared with the same period last year.

Stavrolen’s output last month was 27.9 million tons, compared with 18.2 million tons in February, and showed a week’s improvement in early February. During the reporting period, the company’s total output reached 729,000 tons, down 4% from the same period last year.

Russia’s Natural Gas Industry Co. reduced its capacity utilization rate in March to 0.86 million tons, compared with 0.93 million tons in the previous month. Baskshire’s total HDPE production exceeded 287,700 tons in the first three months of 2019, an increase of 3% over the same period last year.

During the period, the Russian Lower Kamsk Petrochemical Company specializes in the production line of low density polyethylene (LLDPE).