NEW YORK, April 12, 2007 – COMEX copper closed higher on Friday, driven by the weakening U.S. dollar and the year-on-year increase in China’s copper imports in March.

The most active May copper contract closed up 5.9 cents at $2.9460 per pound.

The dollar index fell, signs of China’s economic stability and the strong start of the US corporate earnings season boosted demand for risky assets, making the dollar the worst weekly performance against the euro in four weeks.

Data released by the General Administration of Customs on Friday showed that China’s exports rebounded in March, but imports shrank for the fourth consecutive month and the pace accelerated, reflecting a mixed economic situation as the Sino-US trade negotiations approached a general conclusion.

According to the General Administration of Customs, China imported 391,000 tons of unwrought rolled copper and copper in March, an increase of 26.1% annually compared with the same period last year, and a decrease of 9.1% compared with 430,000 tons in the same period last year.

In the first quarter of this year, China imported 1,180,000 tons of unwrought rolled copper and copper, down 4.3%.

China imported 1,767,000 tons of copper concentrate in March, down 8.0% compared with the previous year, and increased by 10.4%.

On April 9, after the revelry of the previous trading day, chemical sector shares fell in tandem. Among them, the main 1905 contract of methanol futures fell 0.88% on the whole day, closing at 2491 yuan/ton. Since March 29, the main 1905 contract of methanol futures has risen by 4.53%. Industry insiders believe that the domestic methanol plant centralized into the spring inspection, the center of gravity of superimposed crude oil has recently significantly increased, which helps to boost methanol prices.

Methanol port stocks have recently fallen from their high levels. As of April 4, methanol stocks in domestic ports were around 959.3 million tons, down 25.1 million tons from March 28, down 2.55%.

Analysts pointed out that in April each year, domestic methanol plants centralized into the spring inspection, the market supply is tightening. At the same time, the United States, Southeast Asia and other places have also been overhauled, the global supply of methanol will steadily decline. The production profits of downstream methanol enterprises have been repaired recently. In addition, with the arrival of the peak consumption season, the purchasing of enterprises has shown a more obvious warming up. Due to the warming up of downstream consumption in formaldehyde production enterprises, the start-up load is likely to rise further, and the consumption of methanol will increase.

Analysts said that from the crude oil point of view, due to Saudi Arabia led OPEC oil producers’initiative to reduce production more than expected, coupled with the slowdown in the growth of U.S. production, the recent strong rally in the crude oil market. Since April, the focus of crude oil futures prices at home and abroad has obviously moved up. Overall, the global market is still in a tight supply situation in the second quarter. With the improvement of the macro atmosphere, the focus of crude oil prices will rise further. Although domestic methanol does not use crude oil as raw material, coal-based process is the main method, while foreign methanol is also the main method. A sharp rise in crude oil prices will help to raise the prices of coal and natural gas, which will help methanol prices rise simultaneously.

With the end of heating season in the north, the domestic natural gas market has entered the traditional off-season of consumption, but the figure of foreign capital in the market is more active, liquefied natural gas has become the focus of attention and competition of many foreign-funded enterprises.

Relevant leaders of Shanghai Petroleum and Natural Gas Trading Center told reporters at the 19th International Liquefied Natural Gas Conference held here that the number of international energy enterprises visiting the trading center this year increased significantly compared with the same period last year. The cooperation between foreign-funded enterprises and Chinese enterprises has expanded from several major state-owned oil and gas companies to domestic private enterprises, and the content of cooperation has also changed from simple resources trade to production. The downstream extension of the industry chain.

Reporters learned from the conference site that on the one hand, many foreign-funded enterprises hope to have a deeper understanding of China’s oil and gas market reform policy and the process of opening up; on the other hand, they are actively looking for a platform to connect the upstream and downstream of the market, and to reach a wider range of private, small and medium-sized gas enterprises in China.

Saad Sherida Alkabi, Minister of Energy Affairs of the State of Qatar, said that China was one of the central markets for increasing global demand for liquefied natural gas, and Qatar hoped to have more cooperation with China in the future. Qatar has been upgrading its liquefied natural gas production capacity to meet the needs of the future market.

Data show that in 2018, China’s apparent consumption of natural gas exceeded 280 billion cubic meters, becoming the world’s largest importer of natural gas and the second largest importer of liquefied natural gas. The import of liquefied natural gas exceeded 53 million tons, accounting for 60% of the total import of natural gas.

“Liquefied natural gas has gradually become one of the most active forms of natural gas supply by virtue of its advantages of convenient transportation, flexibility, safety and efficiency.” Yang Hua, chairman of China Ocean Oil Group Co., Ltd., said.

Among the major liquefied natural gas enterprises in China, China offshore oil imported 26.42 million tons of liquefied natural gas in 2018, and PetroChina imported more than 15 million tons of liquefied natural gas in the same period.

At present, Hanas Group, a private enterprise, has set up a liquefied natural gas purchasing and trading company in Singapore. “We cooperate with major LNG suppliers around the world. In the past, cooperation with foreign-funded enterprises was mostly in the field of liquefied natural gas procurement. Now we are also developing overseas LNG supply markets, focusing on Southeast Asia, the Middle East and Africa. Christopher Marley, general manager of Hanas Liquefied Natural Gas (Singapore) Co., Ltd.

In addition, the company recently signed a 10-year long-term purchase and sale agreement with Guanghui International Natural Gas Trading Co., Ltd. to supply 700,000 tons of liquefied natural gas annually. Laurent Ville, Senior Vice President of Daudal Natural Gas Business, said Guanghui International Natural Gas Co., Ltd. is developing strongly in the Chinese market, and the new supply contract will further enhance Daudal’s influence in the Chinese market.

Tony Yatt, chief executive of Nigeria Liquefied Natural Gas Corporation, said that Nigeria Liquefied Natural Gas Company had not directly engaged in business with China at present, and many products were transferred to the Chinese market through buyers. Faced with the fast-growing market, Nigeria Liquefied Natural Gas Corporation is looking for opportunities to directly connect with the Chinese market.

At present, China’s natural gas market is in an important stage of market-oriented reform. In the view of the industry, in the future, the natural gas transportation pipeline network, gas storage and liquefied natural gas receiving station and other infrastructure will gradually be fair and open to the market, and the market pricing mechanism of all sectors of the natural gas industry will continue to improve.

Industry insiders expect that China will gradually form a unified and multi-level new pattern of natural gas market, interact closely with the international market, and expand the breadth and depth of international energy cooperation.

Saudi Arabia’s Amy Company unveiled its first profit data since nationalization nearly 40 years ago Monday, unveiling the mystery of its large oil fields, according to World Oil in London. The company’s bond prospectus shows that Ghawar’s daily capacity cap is 3.8 million barrels, far below the market consensus of more than 5 million barrels a day.

The U.S. Energy Information Agency is a government agency that is often used as a benchmark in the oil market to provide statistical information. In 2004, Saudi Arabia and the United States said in a Washington report that the oil field produced more than 5 million barrels a day and has been doing so for at least the past 10 years.

Ghawar’s new maximum production means that during the Permian period, according to government data, the country produced 4.1 million barrels a day last month, making it the world’s largest oil basin. This correlation is not accurate, that is, Saudi oil field is a conventional reservoir, while Permian is an unconventional shale formation, but it shows the change of market power balance.

Safaniyah Oilfield, founded in 1951, is still the largest offshore oil field in the world with a daily production capacity of 1.3 million barrels. Saudi Arabia and the United States operate a total of 101 oil fields.

Saudi Arabia and the United States have a maximum capacity of 12 million barrels per day, as Riyadh has said for many years. The so-called “neutral zone” that Saudi Arabia shares with Kuwait can also produce 500,000 barrels a day.

Although the prospectus confirms the total maximum productivity, the distribution of productivity among oilfields is different from the market’s previous expectations. As a policy, Saudi Arabia maintains its daily oil production at about 1 million barrels to 2 million barrels, only during wars, supply disruptions in other areas or exceptionally strong demand.

Saudi Ami also disclosed reserves in the top five oilfields, showing that some of them have shorter life expectancy than previously expected. Taking Ghawar as an example, its remaining oil reserves are 482,000 barrels, which will last for 34 years in terms of maximum production. Nevertheless, over time, enterprises can often increase reserves by deploying new technologies or technologies.

Saudi oil reserves are enough to sustain production for another 52 years, with a maximum capacity of 12 million barrels per day.

The Negative tunnel gradually dissipated

In recent years, the domestic methanol market is still strong in Northwest China and weak in East China under high inventory pressure. Among them, the sales price of methanol in Northwest China ranges from 2120 to 2250 yuan/ton. Reporters learned that the price of methanol in Northwest China is strong due to the maintenance of several inland methanol plants. However, the methanol inventory in East China is relatively high, and the price of methanol has declined. At present, the spot quotation is 2430-2500 yuan/ton.

With the overall methanol oscillation downward in the last two weeks, market sentiment has also weakened. According to Hu Xin, a futures analyst in Yide, the performance of the current market is actually expected. On the one hand, the impact of the reduction brought about by the previous market expectations of domestic and foreign equipment maintenance did not appear in March. On the contrary, large-scale plants such as Zhonghao, Boyuan and Datang were restarted one after another. The methanol start-up rate remained high and reached a new high at the end of March. Coastal stocks also reached a new high in mid-month. On the other hand, the reduction of VAT reduces the cost of goods in the later period, which has a negative impact on futures contracts after April. In addition, the joint effect of formaldehyde shutdown in northern Jiangsu and southern Shandong and the sharp drop of ethylene glycol on methanol caused by the safety inspection of dangerous chemicals is also an important reason for the recent weakening of methanol.

For the current methanol price, many market participants said that they had basically reflected the “poor expectations”. “Expectation difference” refers to the contrast between the anticipation of reduction in spring inspection and the reality of high innovation in construction. “Methanol prices have fallen for more than two weeks and valuations have fallen to a low level.” Hu Xin said.

It is understood that in the second quarter of each year, the methanol plant in the north, especially in the northwest, will be routinely overhauled. The spring inspection will result in a decrease in the start-up load of the methanol plant in the second quarter. “At present, the profit of coal-to-methanol in Northwest China is good, with an average profit of about 600 yuan/ton. In addition, the price of methanol has stopped falling and stabilized at present, enterprises may postpone overhaul.” Huang Liqiang, director of Jinshi Futures Investment Consulting Department, explained.

It is noteworthy that the recent rise in international oil prices, OPEC + production restriction effect is obvious, crude oil prices in the first half of the year basically did not expect a substantial decline. In this context, the cost support of petrochemical products has been strengthened, most of the product prices have rebounded, and some of the product prices have increased significantly. Affected by this, the recent methanol market sentiment has gradually returned to rationality.

“For the methanol market, the supply reduction caused by the overhaul of foreign units is large, and the import of olefin units in the port area is expected to decrease significantly in April. In order to meet the normal demand, some of the olefin units in the port area began to increase the intensity of inland procurement.” Yu Qiansen, a gold futures analyst, believes that the impact of safety inspections on the methanol market will basically dissipate in the middle of this month, and that the benefits of spring overhaul and a sharp reduction in imports are gradually being realized. “If methanol stocks in coastal areas fall sharply this month, it is reasonable for the market to strengthen again.” In his view, according to the current market development and expectations, there is no basis for a sharp decline in methanol prices, which will gradually strengthen in the later period.

At present, the value-added tax has settled down, the futures and cash arbitrage has begun to leave the market gradually, and the market is showing signs of stopping the decline. In the past two weeks, coastal stocks have begun to decline slightly. Imports are expected to decline in April. Mainland maintenance will also be gradually realized. Later fundamentals may turn better. But in Hu Xin’s view, it is still too early to say that the market reversal, data still need to see the decline in methanol start-up rate and continued inventory depletion.

As the methanol-to-olefin plant in Nanjing is being completed and ready for commissioning, cargo in the port area is expected to decrease rapidly, but whether the follow-up foreign plants can meet the increment is unclear. “It is understood that the Iranian device is not stable and is currently under maintenance. Because of the sanctions imposed by the United States on Iran, the actual supply of Iranian goods is not normal. Whether the supply can be stabilized or not is unknown. If the supply cannot be stabilized, there will even be a shortage of supply and demand in the port area. Yu told Futures Daily.

“In terms of demand, we should pay attention to the recovery after formaldehyde security inspection and the start-up process of new MTO production in Jiutai, Luxi, Chengzhi and Baofeng. In addition, we also need to pay attention to the linkage effect of price changes of ethylene glycol, ethylene and other chemical products on methanol. Hu Xin said that at present, the demand for coal-based olefins accounts for more than half of the total demand for methanol, and the demand for coal-based olefins is crucial to the demand for methanol.