OPEC+ confirmed that it will maintain its production increase plan from May to July
Last night and this morning, OPEC issued a statement on its official website, confirming that it will maintain its production increase plan from May to July. In addition, the OPEC+ Joint Ministerial Monitoring Committee (JMMC) decided that the plenary ministerial meeting originally scheduled to be held on Wednesday will no longer be held. The 30th JMMC meeting and the 17th OPEC+ ministerial meeting will be held on June 1, 2021. .
According to the April 1 meeting, OPEC+ will increase production by 350,000 barrels/day in May and June, and increase production by 441,000 barrels/day in July; Saudi Arabia will also gradually withdraw The voluntary production reduction of 1 million barrels per day will “increase” production by 250,000 barrels per day, 350,000 barrels per day, and 400,000 barrels per day respectively from May to July. In other words, OPEC+ will increase production by more than 2 million barrels per day from May to July.
After the news was released, international oil prices rose instead of falling, recording the largest increase in nearly two weeks. Analysts believe that although the epidemic in India has had a certain negative impact on oil prices, optimism about a strong recovery in demand has offset market concerns about the epidemic.
However, the unexpected increase in US API inventory data released last night restrained the rise in oil prices. Data showed that U.S. crude oil inventories increased by 4.319 million barrels last week. As of the close early this morning, WTI June crude oil futures rose 1.29% to US$62.94 per barrel. Brent crude oil futures for June rose 0.47% to US$66.42 per barrel.
The net profits of steel companies increased significantly in the first quarter due to the hot steel market
On April 27, Qu Xiuli, vice president and secretary-general of the China Iron and Steel Association, said at the first quarter information conference that it is necessary to increase the development and mining of iron ore at home and abroad, improve the steel industry’s resource security capabilities, and curb iron ore prices. Rising momentum.
Qu Xiuli said that since the beginning of this year, my country’s economic operation has continued to recover stably, providing a good environment for the development of the steel industry. In the first quarter, my country’s steel industry showed a trend of maintaining output growth, downstream industries continued to recover, steel exports resumed growth, steel prices rose more abroad than domestically, loss-making enterprises decreased significantly, and energy conservation and environmental protection indicators continued to improve.
According to the reporter’s understanding, in the first quarter of this year, my country’s pig iron output was 221 million tons, a year-on-year increase of 8%; crude steel output was 271 million tons, a year-on-year increase of 15.60%; steel output was 329 million tons , a year-on-year increase of 22.50%. According to estimates from the China Iron and Steel Association, actual steel consumption in major steel-using industries increased by 47% in the first quarter, of which the construction industry increased by 49% and the manufacturing industry increased by 44%; my country’s apparent consumption of crude steel was 258.96 million tons, a year-on-year increase of 15.3%.
“In the first quarter of this year, the price of imported iron ore rose sharply. At the same time, the price of steel rose rapidly, and the increase abroad was greater than that at home. According to monitoring by the China Iron and Steel Association, in the first quarter, the domestic market Steel prices have maintained an upward trend. By the end of March, the China Steel Price Index (CSPI) rose to 136.28 points, an increase of 9.44% from the beginning of the year and a year-on-year increase of 37.37%.” Qu Xiuli said that domestic steel prices have continued to rise since this year, on the one hand due to demand On the other hand, it is driven by the sharp increase in the price of imported iron ore, and it is also affected by the recovery of the international market and the general increase in commodity prices.
According to data from the international consulting organization CRU, the international steel price index in March was 246.0 points, an increase of 28.9% from the beginning of the year and a year-on-year increase of 58.9%.
Qu Xiuli said that while the continued recovery of the domestic economy provides opportunities for the development of the steel industry, the international epidemic is still spreading, the international environment remains complex and severe, and the foundation for domestic economic recovery is still insufficient. Solid, the steel industry is also facing new challenges such as the supply and demand structure that needs to be optimized, the cost pressure on enterprises is increasing, and low-carbon development is imperative. In the next stage, the steel industry will continue to consolidate the results of supply-side structural reform, take multiple measures to strictly prohibit new production capacity, strictly implement reduction and replacement, promote and encourage steel companies to implement market self-discipline, mergers and reorganizations, and then optimize the structure and promote market supply and demand. balance.
In terms of promoting the long-term stability and sustainable development of the industrial chain, Qu Xiuli said that the steel industry must take effective measures to increase the development and mining of iron ore at home and abroad, and improve the steel industry. The ability to guarantee industrial resources can curb the rising trend of iron ore prices; more importantly, we must pay attention to the needs of downstream users, actively optimize product structure, improve product quality, improve service quality, and provide strong support for the transformation and upgrading of downstream industries.
“At the same time, the steel industry will solidly promote green and low-carbon development, and increasing the intensity and speed of ultra-low emission transformation is the current top priority. According to the goal of achieving ‘carbon peak’ before 2030 ‘And the goal of achieving ‘carbon neutrality’ by 2060 requires accelerating research on the low-carbon development roadmap for the steel industry.” Qu Xiuli said.
The rise in steel prices has driven a significant increase in the economic profits of steel companies. According to statistics from the China Iron and Steel Association, in the first quarter, the operating income of member steel companies was 1,541.7 billion yuan, a year-on-year increase of 52.28%; profits and taxes were 100.4 billion yuan, a year-on-year increase of 159.94%; total profits were 77.4 billion yuan, a year-on-year increase of 247.44%.
After the first quarter report came out, many investors said that now we have finally said goodbye to cheap steel prices, and steel companies are no longer in the era of selling a ton of steel to earn a bottle of mineral water. , this year’s steel companies are proud again.
Xie Xu, a senior analyst at Western Futures, believes that there are two main reasons for the sharp increase in profits of steel companies in the first quarter. On the one hand, it is the low base caused by the epidemic at the beginning of last year; On the other hand, in the first quarter of this year, my country’s economyThe price difference of nickel has always been at a high level. Stimulated by profits, precursor manufacturers have increased their willingness to buy nickel beans to smelt nickel sulfate. Nickel bean inventories continued to be destocked from March to April.
How will the Indian epidemic affect the global supply chain?
The number of new confirmed cases of COVID-19 in India has exceeded 300,000 for five consecutive days. Analysts believe that due to data distortion, collapse of the medical system, and shortage of vaccine supply, the epidemic in India is still likely to worsen.
India is one of the major producers and exporters of iron ore and steel. Throughout 2020, China imported a total of 44.8 million tons of iron ore from India. On April 27, the Platts 62% Iron Ore Index, the most representative medium-grade ore price index, reported $193.65, a record high.
Natalie Scott-Gray believes that the Indian epidemic has not had a big impact on iron ore prices. On the contrary, the increasing demand from China and European and American countries is the reason for this round of iron ore prices. The main reason for the increase.
“If India’s current situation is followed, there is a risk of a decline in steel production from May to June, while the impact on iron ore is currently small. Because India’s iron ore exports Mainly low-grade ores, but the demand from China and European and American countries is mainly dominated by medium- and high-grade ores with higher production efficiency, so changes in Indian iron ore production and exports have limited impact on the international market.” Natalie Scott- Gray said that, however, some manufacturing companies in India are currently shut down, which may lead to a decrease in steel demand, but given that steel prices are still based on international demand, the impact is still not significant.
In addition, India is a major global cotton producer, consumer and textile and apparel exporter. In 2020, India’s cotton exports accounted for 13% of the global market share. From the perspective of raw material supply, due to the Indian epidemic Indian cotton exports have been affected, and global cotton supply except India is expected to decrease in the short term. In terms of consumption, Indian cotton consumption accounted for 21% of total global cotton consumption in 2020. The Indian epidemic will also affect global cotton consumption expectations. In 2020, India’s textile exports accounted for 7% of the global market share, and clothing exports accounted for 4% of the global market share. This part of the market share will be seized by other countries due to the epidemic.
“Recently, due to the severe epidemic situation in India, downstream orders have returned. However, if India does not close the country, the volume of orders transferred to the country will eventually be limited. In addition, , In terms of time, the peak textile season has passed, and the orders transferred due to the epidemic in India are also relatively limited.” said Wang Xiaobei, senior cotton analyst at Hongye Futures.
However, Chen Xiaoyan, senior cotton analyst at Tianfeng Futures, believes that the impact of the Indian epidemic on cotton mainly has three aspects. One is the planting of new cotton in India; Planting has basically no impact. The second is the transfer of orders. It is rumored that some of India’s orders were transferred to China. This matter currently needs to be verified. The third is domestic consumption in India. Last year, the epidemic in India led to a 15%-20% drop in domestic consumption in India. This year, the current situation has not seen such a big drop, and it is estimated that it will still have some impact. Among them, the spinning rate in India has dropped from 90% to less than 70%. It is estimated that it will still decline in the future. May decline, slightly bearish on global consumption.
It is worth mentioning that the recent price of crude oil has been around the $60/barrel range. PTA rebounded with oil prices this week, and the main contract increased its positions, rising 2.63% during the week.
Xie Wen, a senior analyst at Wuchan Zhongda Futures, believes that the recent strong PTA price trend is mainly due to the fact that PTA has been boosted by the cost side, the continued rise in acetic acid prices has squeezed profits, and downstream polymerization has Ester operation maintains a high operating rate.
Xie Wen introduced that from a cost perspective, crude oil prices fell last week, but the PX price supply was tight and the decline was limited. , with the expected commissioning of the new PTA unit and the profit concession from naphtha, the PXN price spread expanded to over US$280/ton. The demand for PX has increased due to the expansion of PTA production capacity. Currently, PX has entered the traditional maintenance season. The maintenance in the second quarter involves a total production capacity of more than 5 million tons. In addition, Yisheng New Materials plans to go into production in May, involving a production capacity of 3.5 million tons. By then, the demand for PX will rise further.
It is understood that as of April 27, most manufacturers’ quotations for acetic acid fall between 7,900 and 8,100 yuan/ tons, rising by 200 yuan/ton during the day, which means that the cost of acetic acid to produce one ton of PTA is 320 yuan. The increase in acetic acid prices is mainly due to the expansion of PTA production capacity; the shutdown of foreign acetic acid units has stimulated an increase in domestic acetic acid exports; the device failure rate in the acetic acid market has increased. Before the new acetic acid production capacity is put into operation, acetic acid prices may continue to trend strongly. Judging from the current situation, the price increase of PTA is not as high as that of PX, and the PTA processing difference is around 300 yuan/ton. Considering the rising cost of acetic acid, the probability of PTA processing fees being effectively improved in a short time is low. Therefore, the amount of PTA maintenance may remain the same. At a high level, the production capacity involved in maintenance in May is estimated to be 6.35 million tons.
From March 5 to April 23, the polyester operating rate has remained above 92% for eight consecutive weeks. On April 23, the polyester operating rate increased by 7% year-on-year. Among them, the availability rate of filament and short fiber is high, while the availability rate of bottle flakes has declined seasonally. The overall load operation of the polyester factory is stable, with the average load around 92.98%.
“It is expected that there will be plans to increase the equipment load of polyester in the short term. For example, Xinfengming Zhongyue’s 300,000 tons/year equipment is expected to have a short-term load of around 93%. And in the near future, bottle flakes The increase in export orders and the epidemic in Indonesia have also given the market favorable expectations for downstream demand.” Xie Wen believes that the price driver of short-term PTA may still be on the cost side. The commissioning of new production capacity is expected to have short-term negative effects on PTA prices. However, considering the strength of the PX end, sluggish processing fees, increased maintenance volume, and stable downstream demand, PTA prices or ranges may move upward.
�Cost side. The commissioning of new production capacity is expected to have short-term negative effects on PTA prices. However, considering the strength of the PX end, sluggish processing fees, increased maintenance volume, and stable downstream demand, PTA prices or ranges may move upward.
</p
