On September 18, the phthalic anhydride commodity index was 68.61, unchanged from yesterday, down 42.89% from the peak of 120.13 points in the cycle (2012-02-28), and up 41.70% from the low of 48.42 points on January 21, 2016. (Note: Period refers to 2011-09-01 to date).

Recently, the domestic market price trend of phthalic anhydride continues to rise. The market price of phthalic anhydride in eastern China is rising. The downstream factories are just in need of purchasing. Inventory of factories is still under pressure and high-end transactions are blocked. However, the orders on the market are higher than before, and the market price of phthalic anhydride keeps rising. In East China, the mainstream of neighbouring-law supply negotiations is 7200-7400 yuan/ton, naphthalene-law supply negotiations is 6800-6900 yuan/ton; in North China, the mainstream quotation of phthalic anhydride market is 7000-7200 yuan/ton, the market price keeps rising, some manufacturers increase the ex-factory price, the downstream start-up is not high, purchasing on demand is dominant, the wait-and-see mentality is strong, domestic phthalic anhydride is strong. The plant operates stably, the spot supply of phthalic anhydride is normal, and the price trend of phthalic anhydride keeps rising.

Recently, the price of domestic phthalic anhydride upstream product Sinopec has increased by 200 yuan/ton to 6700 yuan/ton. Due to the overhaul of domestic phthalic anhydride factories, on-site supply shortage, the price of phthalic anhydride has risen, the market of imported phthalic anhydride in port area has risen, the recent market of phthalic anhydride in port has been better, the stock of port has been substantially lower, and Up, the actual transaction price is based on negotiation. Recently, domestic overhaul facilities for phthalic anhydride have increased. The supply of phthalic anhydride in the field is very tight. Supported by the price of phthalic anhydride, the market price of phthalic anhydride continues to rise. DOP prices in the downstream rose, isooctanol prices rose, and DOP costs rose. DOP price is higher, DOP downstream demand is normal, customer purchasing enthusiasm is general, downstream PVC market volatility is higher, DOP market mainstream turnover price 8000-8250 yuan/ton, downstream prices have risen, it is expected that the market price of phthalic anhydride will maintain a higher trend in the later period.

On September 18, the hydrofluoric acid commodity index was 94.10, unchanged from yesterday, down 32.99% from the peak of 140.43 points in the cycle (2018-02-21) and up 75.59% from the low of 53.59 points on November 30, 2016. (Note: Period refers to 2011-09-01 to date).

According to statistics, the domestic market price trend of hydrofluoric acid remains low, up to the present domestic market price of hydrofluoric acid is 10 370 yuan/ton, the domestic start-up rate of hydrofluoric acid is less than 60%. Enterprises reflect that the current spot supply of hydrofluoric acid is sufficient, and the hydrofluoric acid market is not moving in the near future. As the downstream demand is not improving, some hydrofluoric acid is not available. Manufacturers continue to reduce prices, hydrofluoric acid market prices continue to fall. At present, the mainstream of hydrofluoric acid negotiations in the southern region is about 9500-10000 yuan/ton, while the price of hydrofluoric acid in the northern market is 9500-10000 yuan/ton.  Domestic hydrofluoric acid market price maintains low level, spot supply is sufficient, but demand is poor, hydrofluoric acid market is weak.

Upstream fluorite market prices fell, up to 18 days fluorite price was 2877.78 yuan/ton, upstream raw material prices fell to the hydrofluoric acid market has a negative impact, the hydrofluoric acid market prices are affected by the lower price of raw material fluorite at a low level.  Recent downstream refrigerant market trading market is general, domestic refrigerant R22 market shocks down, from the market supply point of view, refrigerant R22 market continues to be weak, manufacturers reduce the start-up load, market supply capacity has decreased, inventory pressure has been buffered. On the demand side, downstream air-conditioning manufacturers’overhaul, the demand only declined but did not increase, and the price of domestic large enterprises fell to 1250-14500 yuan per ton. The domestic market price of R134a has declined, the start-up rate of production enterprises has remained low, the market demand for refrigerants has decreased, and manufacturers mainly export their products. However, on-site transaction prices continue to decline, merchants purchase on demand, the end of the peak season, downstream terminal demand only declined, hydrofluoric acid market prices declined. However, the on-site transaction price is lower, merchants purchase on demand. Recently, due to the normal supply of goods, downstream demand is not improving, and the market price of hydrofluoric acid remains low.

Refrigerant field turnover is poor, refrigerant industry equipment start-up rate remains low, for upstream hydrofluoric acid market demand is limited, hydrofluoric acid spot supply is sufficient, Business Analyst Chen Ling believes that the hydrofluoric acid market may be slightly lower.

Price Trend

According to the data monitored by business associations, on September 17, PET water bottle manufacturers quoted 7487.5 yuan/ton, which was 4.17% higher than the 16-day price of 7187.5 yuan/ton, and 33.85% lower than the same period last year.

On September 16, the PET commodity index was 54.04, up 0.84 points from yesterday, down 47.92% from the peak of 103.76 points in the cycle (2011-09-22), and up 13.20% from the low of 47.74 points on January 25, 2016. (Note: Period refers to 2011-09-01 to date)

II. Cause Analysis

Products: On September 14, two refineries in Saudi Arabia and the United States were attacked by drones, which affected Saudi oil production of 5.7 million barrels per day, and the disruption of Saudi supply caused oil prices to soar. Upstream products PTA and ethylene glycol market boosted, PET market prices have risen. At present, the polyester plant starts to maintain a high level, but the current market demand is limited, supply exceeds demand, driven by strong raw material end, the downstream follow-up is general, market turnover is flat, mostly wait-and-see, just need to purchase. As of September 17, the main quotation range of PET water bottle manufacturers is 7350-7550 yuan/ton, which is generally increased by 250 yuan/ton-300 yuan/ton.

Material aspect: PTA supply is sufficient at present, and there are plans to add new units, the overall start-up is high, inventory is still under pressure. Ethylene glycol plant start-up rate decreased, port inventory decreased, coupled with the Saudi attack led to the reduction of ethylene glycol production, polyethylene glycol prices.

Industry: According to the price monitoring of business associations, there are 9 kinds of commodities in the rising and falling list of commodity prices on September 16, 2019. The top three commodities are LDPE (2.14%), LLDPE (1.82%) and PET (1.59%). There are three kinds of goods falling in the ring-to-ring ratio: PC (-1.72%), EPS (-0.49%) and PA66 (-0.42%). The average daily rise and fall was 0.36%.

3. Future Market Forecast

PET analysts believe that, boosted by crude oil, cost-side support is good, the market of PET is expected to continue to rise in the short term, but cautious terminal demand, a strong downstream wait-and-see atmosphere, and the dynamics of crude oil market and other factors, the rise is not sustainable.

On September 16, the hydrofluoric acid commodity index was 94.10, unchanged from yesterday, down 32.99% from the peak of 140.43 points in the cycle (2018-02-21) and up 75.59% from the low of 53.59 points on November 30, 2016. (Note: Period refers to 2011-09-01 to date).

According to statistics, the domestic market price trend of hydrofluoric acid remains low, up to the present domestic market price of hydrofluoric acid is 10 370 yuan/ton, the domestic start-up rate of hydrofluoric acid is less than 60%. Enterprises reflect that the current spot supply of hydrofluoric acid is sufficient, and the hydrofluoric acid market is not moving in the near future. As the downstream demand is not improving, some hydrofluoric acid is not available. Manufacturers continue to reduce prices, hydrofluoric acid market prices continue to fall. At present, the mainstream of hydrofluoric acid negotiations in the southern region is about 9500-10000 yuan/ton, while the price of hydrofluoric acid in the northern market is 9500-10000 yuan/ton.  Domestic hydrofluoric acid market price maintains low level, spot supply is sufficient, but demand is poor, hydrofluoric acid market is weak.

Upstream fluorite market prices fell, up to 16 days fluorite price was 2888.89 yuan/ton, upstream raw material prices fell to the hydrofluoric acid market has a negative impact, the hydrofluoric acid market prices are affected by the lower price of raw material fluorite at a low level.  Recent downstream refrigerant market trading market is general, domestic refrigerant R22 market shocks down, from the market supply point of view, refrigerant R22 market continues to be weak, manufacturers reduce the start-up load, market supply capacity has decreased, inventory pressure has been buffered. On the demand side, downstream air-conditioning manufacturers’overhaul, the demand has only decreased but not increased, and the price of domestic large enterprises has fallen to 14,000-14,500 yuan per ton. The domestic market price of R134a has declined, the start-up rate of production enterprises has remained low, the market demand for refrigerants has decreased, and manufacturers mainly export their products. However, on-site transaction prices continue to decline, merchants purchase on demand, the end of the peak season, downstream terminal demand only declined, hydrofluoric acid market prices declined. However, the on-site transaction price is lower, merchants purchase on demand. Recently, due to the normal supply of goods, downstream demand is not improving, and the market price of hydrofluoric acid remains low.

Refrigerant field turnover is poor, refrigerant industry equipment start-up rate remains low, for upstream hydrofluoric acid market demand is limited, hydrofluoric acid spot supply is sufficient, Business Analyst Chen Ling believes that the hydrofluoric acid market may be slightly lower.

According to today’s oil price report, the global economic weakness, slowing oil demand growth and growing shale oil production in the United States have made oil oversupply the focus of media and analysts this year. However, in a few years, the biggest concern in the oil market is likely to be a shortage of oil supply, which may push up oil prices.

Continued oversupply has delayed the implementation of the OPEC cut-off agreement until next year, replacing concerns about the looming global oil supply crisis with insufficient long-term investment in replenishing conventional oil reserves. Long-term oversupply and weak oil demand have depressed oil prices for most of this year. However, lower oil prices are also beginning to affect the pace of oil production in the United States, the world’s largest supplier of shale oil.

Rob Pinkerton, author of Seeking Alpha, believes that U.S. oil production will increase in the next few years, but may peak in the early 1920s. By 2024, he said, most of the recoverable reserves will be extracted from U.S. shale reservoirs, leaving a gap in the global oil supply that only newly discovered conventional offshore resources can fill to some extent.

International organizations also set the peak of U.S. shale oil production in the 1920s, although most people predict it will be in the late 2020s.  Specialized oil organizations, analysts and major state-owned oil companies in OPEC member countries have warned for years that the oil supply gap may widen in just a few years due to a reduction in investment following the sharp fall in oil prices in 2014.

The slowdown in U.S. shale oil production further illustrates that the global supply crunch will come in five years or less, although OPEC and its allies are currently trying to eliminate the global oversupply caused by worries about demand growth.

The International Energy Agency (IEA) recently lowered its demand growth forecast for 2019 by 100,000 barrels a day to 1.1 million barrels a day. The agency had previously found that demand growth from January to May was only 520,000 barrels a day, the lowest since 2008.

But the IEA also predicts that US production of dense oil will continue to rise by 2025, and says, “Since then, according to our current estimates of exploitable resources, production will begin to decline gradually.”

By the mid-1920s, there will be signs of energy exhaustion in many areas of the United States with higher productivity. “This means that the oil production of the rig will be lower in 2025 than it is now, so more wells need to be completed to maintain or increase production,” the IEA said.

In the latest World Oil Outlook, OPEC expects non-OPEC oil supplies to peak at the end of the 1920s, as tight oil supplies in the United States are expected to peak.

On the other hand, global oil consumption will continue to grow, at least in the next 10 years, due to the demand of petrochemical, truck transport and aviation industries. In its World Energy Outlook released in November last year, the IEA said that the oil industry would need to double the number of approved conventional oil projects to meet the expected growth.

“Without such a rebound in investment, US shale production, already expanding at a record rate, will have to increase by more than 10 million barrels per day from today to 2025 — the equivalent of adding Russia’s global supply for seven years, which will be unprecedented,” the IEA said.

As the growth rate of shale oil production in the United States slows down, traditional oil investment is still much lower than five years ago, and the supply gap may emerge as early as the early 1920s.