With the continuous improvement of LNG production capacity, the global LNG trade scale will continue to expand, and it is expected to exceed 50 billion cubic meters by 2023, an increase of about 30% over 2017.

On April 2, at the 19th International Liquefied Natural Gas Conference (LNG2019), known as the “Olympic Games” of the LNG industry, Yang Hua, chairman of China Ocean Petroleum Group Co., Ltd., made the above judgment in an interview with reporters of the Economic Reference Daily.

He disclosed that, as the third largest LNG importer in the world, CNOOC will actively promote technological innovation, management innovation and business model innovation in the future, continue to vigorously develop natural gas business, establish a stable supply of LNG resources, and promote the construction of LNG receiving stations. It is expected that the proportion of natural gas will reach 50% by 2030, and LNG receiving stations will reach 15-17, with annual receiving and processing capacity exceeding 80 million tons. Let more users use more economical LNG products. At the same time, we will promote the opening and sharing of LNG receiving stations in an orderly manner, so as to make more enterprises and entities participate in all aspects of LNG industry chain with a more active and open mind, vigorously promote LNG heavy truck and ship filling business, and actively promote its application in the field of transportation.

In today’s world, the trend of clean and low-carbon energy development is becoming more and more obvious. The energy transformation process characterized by high efficiency, cleanliness, diversification and intelligence is accelerating.

In Yang Hua’s view, natural gas, as an efficient, low-carbon and clean fossil energy, has begun to replace primary energy sources such as coal and petroleum in many energy-using fields. It is an important bridge to transition to new energy system and a realistic choice to promote energy transformation. By the end of 2017, the recoverable reserves of natural gas in the world were 193.5 trillion cubic meters and the recoverable life was 52.6 years. The long-term growth trend of natural gas resources supply is promising, which can guarantee the sustainable development of natural gas industry.

Among them, LNG has gradually become the most active form of natural gas supply with the advantages of easy transportation, multi-subject, flexibility, safety and efficiency. Data show that China’s LNG imports accounted for 44% of global LNG trade growth in 2017 and nearly 60% in 2018.

As early as the mid-1990s, China National Offshore Oil (CNOOC) took the lead in introducing LNG into the southeastern coast in line with the national energy strategy. At present, 10 LNG receiving stations have been built, ranking first in China, with an annual receiving and processing capacity of more than 45 million tons. In 2018, China offshore oil imported 26.42 million tons of LNG, with a total import volume of 150 million tons, accounting for more than 65% of the total import volume in the country.

In addition, CNOOC has established three core independent technology systems, namely, natural gas liquefaction technology, LNG receiving and storage technology and clean energy comprehensive utilization, through independent research and development and mastery of the core technology of LNG industry chain. CNOOC has established independent technology brands such as CGTank?, CGLiq?, and has become the first energy company in Asia to fully master the core technology of storage tanks and have EPC general contracting capacity.

Yang Hua believes that the proportion of natural gas consumption in primary energy consumption in China is still far behind that in developed countries. According to the 13th Five-Year Plan of Natural Gas, it is expected that the proportion of natural gas in primary energy will reach 10% by 2020. Importing LNG will play an increasingly important role in achieving this goal. China will make positive contributions to global LNG trade and even to the development of global natural gas market in the future.

“With the continuous emergence of new technologies, the continuous innovation of business models and the active participation of more subjects, the global LNG market will become more active.” He believes that while the scale of LNG trade continues to expand, the flexibility and liquidity of global LNG trade will be further enhanced, the main body will become more diversified, contract duration, contract volume, pricing methods and delivery modes will be more flexible, and the volume of short-term and spot trade will be more. Especially in the wave of integration of new technology represented by digitalization and LNG industry, the cost of production, transportation and utilization of LNG will be further reduced, and the price competitiveness will be effectively improved.

However, it is noteworthy that the global LNG industry still faces some challenges. Yang Hua said that the construction and operation costs of facilities such as LNG liquefaction plants and transport ships are still high and the economy needs to be further improved; international LNG prices are greatly affected by market fluctuations and have not yet formed a global unified pricing system, and the Asian premium problem is still prominent; some LNG resource suppliers still adopt the old way to meet the requirements of the same period and trade destination. Strict; large-scale utilization of natural gas/LNG in Asia is still limited by infrastructure bottlenecks and so on.

He suggested that in order to promote the development of global LNG trade, all parties should further promote the innovation and breakthrough of LNG business cooperation mode, jointly explore innovative schemes of business cooperation mode, and improve the flexibility of business contract terms. Asian buyers should further strengthen cooperation, exert the geographic advantages of the world’s largest LNG import region by establishing communication and coordination mechanisms, form a community of interests, and actively explore the establishment of regional natural gas market price index. In order to conform to the development trend of natural gas/LNG market, Asian countries have made the natural gas market open and transparent through market-oriented reforms and other mechanisms. On this basis, they have strengthened contacts and cooperation, optimized the resource allocation of LNG in Asia, enhanced the voice of LNG purchasing pricing, and strived to form the natural gas price index in Asia as soon as possible. In cooperation with LNG exporting countries in natural gas exploration and development, natural gas resources are imported by means of upstream participation and output sharing, so as to ensure the long-term and stability of imported gas sources.

This week, the supply pressure of polyolefin remained high, but at the end of the month, most of the petrochemical plant prices were stable, and the tax adjustment led to some downstream manufacturers to take appropriate orders, the demand was ahead, and the polyolefin futures price showed a weak fluctuation trend. As of Friday’s closing date, L1905 contract closed at 8365 yuan/ton, down 65 yuan/ton per week, 0.77% per week. The highest price in the week was 8455 yuan/ton, and the lowest price was 8275 yuan/ton. In terms of position, the weekly position decreased by 45792 to 3019,000 hands, with a turnover of 969,300 hands. PP1905 contract closed at 8604 yuan/ton, down 3 yuan/ton per week, a weekly decline of 0.03%, the highest 8672 yuan/ton, the lowest 8490 yuan/ton. In terms of position, Zhou’s position decreased by 48,390 to 336,900 hands and turnover by 2.04 million hands.

This week, the spot market of polyolefin is mainly small consolidation, with two light market transactions, no obvious bright spot, the overall stability of TRADERS’quotations, and some small fluctuations. At present, the mainstream price of LLDPE is 8450-8650 yuan/ton, most of which have little change, only a few fluctuate around 50 yuan/ton; the mainstream price of PP wire drawing is 8600-8950 yuan/ton, most of which tend to be stable.

Fundamental analysis:

Cost side: Next week, the international crude oil shock may continue, but the focus is expected to move up. Despite the unexpected increase in U.S. crude oil inventories, it is mainly due to the sharp decline in exports and hindered refinery processing, which can be seen from the decline in refined oil inventories. Therefore, the downward trend of crude oil stocks will not change, and short-term increase will not become a long-term shortfall in pressure oil prices. Later, China and the United States paid close attention to the situation of trade negotiations, and two consecutive rounds of negotiations are expected to give market confidence. In addition, good expectations of overall OPEC output cuts in March also boosted oil prices.

Supply side: PE, this week, the number of domestic petrochemical plant maintenance has decreased, the loss of output is 11.4 million tons. Next week, new maintenance enterprises have Zhongtian Hechuang. Preliminary forecast is that the loss of next week’s maintenance will be around 10.1 million tons, a decrease of 0.13 million tons annually. On the import side, port stocks continue to accumulate slightly, and the overall domestic supply pressure is still in place. For PP, the loss of equipment maintenance this week was about 34.8 million tons, 0.24% less than last week’s 34.9 million tons. Dalian Xitai plans to overhaul next week. It is estimated that the amount of overhaul losses will rise annually, but Ningxia Coal and delayed installation and overhaul plans have been delayed, and the expected overhaul effect is still difficult to reflect in the short term. In terms of new capacity, Jiutai energy supply is expected to be put into the market in mid-April, including PE plant capacity of 300,000 tons, production capacity of 7042, PP plant capacity of 350,000 tons, production of L5E89.

Demand side: PE, with warmer weather, plastic film demand is expected to weaken, pipe market will climb, other downstream start-up changes little. PP, downstream demand remains stable, the overall lack of bright spots. Under the influence of tax reduction, some of the demand is in front of the market. It is estimated that the short and medium-term downstream factories just need to purchase, which has limited support for the market.

Inventory situation: This week coincides with the end of the month, coupled with the reduction of VAT in April, which stimulates some buyers to purchase. Petrochemical inventory declines rapidly. Petrochemical inventory is transformed into social inventory. Tax reform is implemented on April 1, and social supply is under pressure or constitutes the main idea of vacancy. Inventory is expected to decline slowly next week. After the accumulation of holidays, the relatively weak demand can hardly make the inventory consume quickly in the short term. The inventory structure is the key to affect the recent market trend.

In terms of cross-variety arbitrage, PP supply pressure will be greater than PE in the long run this year, but in terms of rhythm, the second and third quarters may be the concentration period for new production capacity. In the short term, we need to pay close attention to the differences between PE and P P in inventory status, late equipment maintenance and new production capacity delivery. At present, the operation is difficult and wait-and-see is appropriate.

Conclusion and suggestions for operation:

Generally speaking, the contradiction between supply and demand in polyolefin market is still prominent in the near future, with fewer overhaul units and high supply. With the production of Jiutai energy polyolefin plant, the domestic production is expected to increase. Influenced by the reduction of value added tax, Petrochemical stocks are converted into social stocks. Tax reform began on April 1, and the social supply is under pressure or constitutes the main empty idea (the pre-sale price of next month has appeared 100).- 150 yuan/ton falls back. However, crude oil is high, cost support is strong, the space below polyolefin is not strong, and the short-term futures have the possibility of repairing the base difference. It is expected that the short-term market will continue to maintain weak shocks, with L1905 pressure level 8800 and support level 8300; PP pressure level 8900 and support level 8400, which need to focus on recent inventory changes, post-plant maintenance and new production capacity. In the long run, polyolefin production in 2019 will continue to increase at a high rate, and the price focus will move downward. It should be noted that this Friday, polyolefin futures night market opened, whether the impact on the market remains to be seen.

As Japan is temporarily granted amnesty in the U.S. sanctions against Iran, with no hope of extending this treatment, Japanese companies will stop importing oil from Iran again after April.

According to the Japan Release Association (NHK) on March 31, US President Trump restarted oil sanctions against Iran in November last year and asked countries to stop importing Iranian oil. But Japan and other countries have temporarily been granted amnesty, which is extended until May this year. As a result, Japanese companies JXTG and Costa Moore Energy Holdings resumed Iranian oil imports that had been interrupted for some time.

Reported that since then, the Japanese government has been in consultation with the U. S. government, but no progress, pardon treatment is not expected to extend. As a result, Japanese companies will stop importing oil from Iran again after April.

Relevant enterprises said that although the proportion of oil imported from Iran is not high, it will not affect Japan’s domestic oil and gas supply. However, the diversification of crude oil imports is indispensable, so the Japanese government will be asked to continue urging the US government to extend the amnesty treatment for Iranian oil imports.

It is understood that on November 5, 2018, the date for the United States to fully resume its blockade against Iran is on schedule. On the same day, the United States Secretary of State announced that eight countries and regions, including China, India, Japan, Italy and South Korea, were granted temporary amnesty for Iranian crude oil imports, which will last 180 days.

According to the data of the U.S. Energy Information Agency, the main exporters of Iranian crude oil in 2017 are China (24%), India (18%), South Korea (14%), Turkey (9%), Italy (7%) and Japan (5%). The U.S. amnesty list covers almost 70% of Iranian oil exports.

According to a report released by the World Economic Forum on Mar 25, the process of transforming the energy system to a more affordable and sustainable direction has stalled in the past five years, despite increased global energy availability.

The report uses the Energy Transition Index to assess the performance of energy systems in 115 economies worldwide. The results show that since 2014, more and more people around the world have access to energy, but the affordability of energy has declined, and the environmental sustainability of energy systems has not improved.

According to the report, Asia’s emerging and developing economies have made tremendous progress in promoting universal access to electricity. At the same time, due to the continuous improvement of urbanization, industrialization and living standards, Asia will become the most important region to promote future energy transformation.

The report finds that the biggest challenge in building a future-oriented global energy system lies in the inadequate readiness of the world’s large economies. The report suggests that we should get rid of the dependence of economic growth on energy consumption, improve the efficiency and sustainability of energy systems through large-scale application of technological innovation, and address inequalities and injustices in the process of energy transformation in order to accelerate the global energy transformation.

According to the latest customs data, the cumulative export of all kinds of chemical fertilizers increased significantly from January to February, with the growth rates of urea and compound fertilizers reaching about 400% and 900% respectively. Most notable is potassium sulfate. The same growth rate of 1700% in January has shocked the chin, and the data in February reached an astonishing 7000%. Exports from January to February have far exceeded the total volume of 2018.

Comments: Since this year, no export tariffs have been imposed on chemical fertilizers. Among them, export tariffs on potassium fertilizers have cancelled the quantitative pricing policy, which is more affected by the benefits. Relevant data show that the mainstream factory price of potassium sulfate in China has a higher price advantage than that in overseas markets. Authorities predict that China’s potassium sulphate exports will exceed 150,000 tons in the first quarter, and by this estimate, the same-rate growth in March will be more than 300 times incredible. Despite the seemingly low absolute quantity, the estimated annual export volume of about 600,000 tons is considerable for the apparent consumption of about 4 million tons of potassium sulfate worldwide.

Among A-share companies, Guannong (600251) holds 20.3% of the investment in Xinjiang Lop Nur Potassium Salt, which has an annual production line of 1.2 million tons of potassium sulfate. The total production capacity of potassium sulfate reaches 160 tons, making it the largest and most advanced potassium sulfate fertilizer base in the world. The company’s main profit growth came from China Investment Potassium. CITIC Guoan (000839) and Sirte (002538) also have certain potassium sulfate production capacity.