As of the afternoon close of July 6, most domestic commodity futures markets closed higher. In terms of increase, ferrosilicon and hot coil rose by more than 3%; thread, rubber, urea, iron ore, PTA, LPG, No. 20 plastic, Shanghai tin, wire rod, soda ash, and stainless steel rose by more than 2%, among which LPG, soda ash, and Shanghai tin The main contract reached a new high. In terms of decline, styrene fell by more than 3%; corn starch and fiberboard fell by more than 1%. During the night session, most domestic commodity futures ended lower, with energy and chemical products leading the decline. Fuel oil fell by 4.25%, PTA fell by 4.2%, staple fiber fell by 3.22%, ethylene glycol fell by 3.04%, and methanol fell by 2.85%. Most of the black series fell, with coke falling by 2.83%, coking coal falling by 2.4%, and iron ore falling by 1.14%.
Early this morning, international crude oil futures closed sharply lower. WTI August crude oil futures closed down $1.79/barrel, or 2.38%, to $73.37/barrel. Brent September crude oil futures closed down $2.63/barrel, or 3.41%, to $74.53/barrel.
International oil prices have risen steadily recently, and many interviewees believe that the current surge is due to increased concerns about supply shortages. The driving factor that stimulated the accelerated rise in oil prices was the fact that the OPEC+ meeting was delayed for three days and still failed to produce any results.
Li Yanjie, head of CITIC Construction Investment Futures Energy and Chemicals Division, told reporters that on July 1, OPEC production led by Saudi Arabia Oil countries and Russia have initially reached an agreement at the meeting to voluntarily “increase oil production by 400,000 barrels per day per month from August to December 2021, and plan to extend the original agreement deadline from April 2022 to 2022.” End of the year”. However, at the last minute, the United Arab Emirates rejected the agreement and hoped to increase the OPEC+ crude oil production reduction baseline. After two days of mediation, the two sides are still at a deadlock and have not reached an agreement on the next consultation time. The failure to reach a new agreement means that the alliance will continue to maintain the previous production reduction scale and time limit. Therefore, the continuous rise in oil prices is inseparable from the expectation of tight supply. The preliminary agreement on July 1 was better than the previous market expectation. OPEC+ will increase production by 500,000-1 million barrels per day from August, which is bullish for oil prices; and 8 – No increase in production in December means a tighter supply market, further stimulating oil prices higher.
“OPEC+ canceled the meeting planned for Monday. The time of the next meeting has not yet been determined. So far, the OPEC+ meeting in July has not yet been Any production increase plan will continue to maintain quotas at the current level. Oil prices rose in response, and WTI oil prices rose significantly faster than Brent, and the price difference between the two narrowed rapidly.” said Zhong Meiyan, director of energy and chemicals at Everbright Futures.
Zhong Meiyan believes that July is an important time window for oil prices to rise, and the seasonal peak season of demand and supply are not yet available. pressure. The current price will have a certain impact on the stability of OPEC+. Once OPEC+ differentiates, production reduction constraints may be in vain. Each company will push up production according to its own strength, and actual supply will increase, thus making up for the supply and demand gap in the oil market. However, OPEC+ currently has relatively strong pricing power on oil prices. It has continued since April 2020 and has also enhanced the effectiveness and flexibility of expectation management. The next policy choices of OPEC+ will still be an important factor affecting the crude oil supply and demand balance sheet. It is too early to say that control has been weakened. The market has pushed up oil prices due to the difference between trading reality and expectations, and OPEC+ has also benefited from it.
It is understood that the market is currently in a tight supply situation that started in May last year. As global oil demand continues to recover, The growth in transportation demand during the peak summer driving season in the United States, rising speculative bullish sentiment in the market, and OPEC+’s cautious increase in production and other favorable factors have accelerated the destocking of crude oil.
“Although OPEC+ supply is currently bullish for oil prices, the alliance faces the biggest crisis in last year’s price war, especially in At a time when global inflationary pressures are rising, will the breakdown of this round of negotiations escalate into another breakdown of the alliance? This possibility is enough to trigger market concerns. In addition, as the progress of the US-Iran negotiations is overdue for three months, there is a risk that Iranian oil supplies will flow back to the market. Increasing expectations have also led OPEC+ to be cautious in its recent production increase policy,” Li Yanjie said.
As for the trend of crude oil in the second half of the year, Li Yanjie believes that the overall trend is still bullish, mainly benefiting from the recovery of global oil demand. Trends, the seasonal characteristics of the U.S. summer driving season and OPEC+’s idea of maintaining tight supply in the oil market, but mutated viruses, increased expectations of liquidity inflection points and negative Iranian oil supply will cause interference. It should be noted that the uncertainty on the supply side mainly comes from OPEC+. The first is whether OPEC+ will change its output policy from August to December at the ministerial meeting next month. The second is the specific time for Iranian oil to return to the market and the pace of production increase. The node that can be watched in the near future is August 3 (the inauguration day of the new Iranian president). If the US-Iran negotiations are reached before then, Iran will most likely gradually move towards 4 million in the third quarter. The target of increasing production is barrels per day; and if the negotiations remain deadlocked until the fourth quarter, the major developed economies in Europe and the United States (under the current vaccination progress) are expected to improve jet fuel demand through achieving herd immunity to boost crude oil, but at the same time, the colder weather will boost the new coronavirus The spread increases the risk of epidemic disruption and increases the possibility that the market will not be able to fully digest the risk of additional supply from Iran. Therefore, the overall upward trend of oil prices in the second half of the year has not changed. However, against the backdrop of gradually increasing expectations of the arrival of a turning point in global liquidity, it will be more difficult to continue the upward trend in the first half of the year.
However, in Zhong Meiyan’s view, oil prices are on the way to accelerate, with Brent oil prices rising to 80-85 US dollars per barrel. The first line becomes the road of relative certaintypath. Looking at the market outlook, oil prices are expected to rise and then fall in the second half of the year. After the peak season demand in the third quarter, increased supply and accumulated storage will dominate the decline in oil prices.
Affected by this, the price of ethylene glycol has risen. As of July 6, MEG has risen by 1.75% on a weekly basis, close to The short-term high is 5284 yuan/ton.
Zhou Ao, an energy chemical researcher at Everbright Futures, told reporters that due to seasonal maintenance and poor profits, the current operating load of domestic storage equipment is low, but subsequent maintenance equipment will gradually restart , the domestic operating rate will rebound from a low level. In terms of new production capacity, Satellite Petrochemical and Zhejiang Petrochemical have been operating steadily, and new units such as Hubei Sanning, Gulei Petrochemical, and Jianyuan Coal Coking will also be put into operation in the second half of the year. This will intensify the supply pressure of ethylene glycol in the second half of the year, and ethylene glycol itself Profits will be further compressed.
It is worth noting that both domestic and export sales of textiles and clothing performed well in the first half of the year. Domestic sales basically returned to pre-epidemic levels, and were on a steady growth trend in the second half of the year; the current high shipping prices The growth of exports is still limited, but as the shortage of containers and the inefficiency of maritime logistics are resolved in the second half of the year, there is still hope for exports.
Xie Wen, senior analyst of Wuchan Zhongda Futures, believes that from the perspective of imports, as the current sea freight is still at a high level, the estimated arrival volume of ethylene glycol at the port is still low. From the profit side, the profits of oil-to-ethylene glycol, methanol-to-ethylene glycol, and imported ethylene-to-ethylene glycol are all not good. Therefore, even under the pressure of new equipment being put into operation, the operating rate of ethylene glycol is still overall Below 60%, the operating rate of petroleum-to-ethylene glycol is below 70%, and the operating rate of coal-to-ethylene glycol has dropped from a high of 60% to about 35%, which has boosted ethylene glycol prices.
“We are cautiously optimistic about the demand for textile and apparel in the second half of the year.” Zhou Ao said that from the polyester side, there will be a large increase in weaving and texturing this year. High, forming a rigid support for polyester demand. As oil prices and polyester raw material prices continue to rise, downstream purchasing mentality has also undergone some relatively positive changes, and speculative stocking needs have begun to appear. However, considering that the current polyester end inventory is high, profits are meager, and polyester load There is still pressure. However, as long as the price of raw materials does not rise or fall sharply, polyester and downstream products can still maintain a certain level of profitability, and demand is still resilient, waiting for the traditional peak season of the Golden Nine and Silver Ten to gradually start. In addition, the operating rate of polyester remains above 90%. Due to obvious downstream price cuts and destocking, the weaving off-season operation continues, and the short-term polyester operating rate remains strong.
Xie Wen believes that as crude oil prices and coal prices move upward, ethylene glycol has rebounded significantly due to the boost from the cost side. Looking to the market outlook, crude oil prices and coal prices have There is no basis for a sharp drop in prices in the short term. Before the launch of new production capacity, the logic that ethylene glycol prices are boosted by the strong cost side is still there. The newly added production of ethylene glycol in the third quarter was roughly 1.96 million tons, and the new production capacity has not yet been put into operation. In addition, Shaanxi Coal Yulin Chemical Company’s new chemical materials project based on coal fractionation and utilization was temporarily suspended, involving 1.8 million tons of ethylene glycol production capacity. This news has a certain boost to the market. In addition, the polyester end may have a need to replenish its inventory due to the obvious decline in inventory. Therefore, the subsequent market changes of ethylene glycol mainly depend on the game between the launch of new production capacity and the increase in downstream demand.
Zhou Ao also believes that under the strong oil and coal prices, MEG’s production profits have been further compressed and cost support has been strong, but it is difficult to give MEG a pass during the production capacity expansion cycle. High valuation, absolute price still mainly follows cost. In the short term, oil prices remain strong and cost support remains. It is difficult for import volume to increase significantly in the short term. However, new domestic production capacity will gradually release output, and ethylene glycol supply is expected to increase significantly month-on-month starting in July. However, the demand side remains generally stable, and the inventory of ethylene glycol raw materials in downstream polyester factories is not high. Therefore, although ethylene glycol gradually enters the inventory accumulation cycle in July, with cost support and demand relatively stable, and with the overall atmosphere of the polyester industry chain improving, ethylene glycol prices are expected to be slightly stronger, but the increase may not be as high as Other varieties. </p
