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June 2023 Peak Season Demand Rebound Marginal Improvement in Petroleum and Chemical Industry Prosperity Indices
2023/7/12
Introduction
Petroleum and chemical industry boom index by the China Petroleum and Chemical Industry Federation and Shandong Zhuochuang Information Co., Ltd. jointly compiled, is the petroleum and chemical industry micro-boom cycle monitoring indicators, including "oil and gas mining boom index" "fuel processing industry boom index "" chemical raw materials and chemical products manufacturing industry boom index "" rubber, plastic and other polymer products manufacturing industry boom index " four sub-index. The prosperity index of petroleum and chemical industry prosperity index is selected to measure the potential output and economic benefits of the industry, including production micro-data and industry efficiency data, production micro-data include: capacity utilization rate, product profitability, finished goods inventory level. The basic data comes from the results of regular research and evaluation established with more than 1,000 enterprises.
Core Summary
Demand recovery, inventory replenishment cycle expected to start
In June 2023, the petroleum and chemical industry sentiment index fell slightly from the previous year, still in the cold range. 2023 first half of the year, in the expectation of economic recession, international commodities are facing downward price pressure; 2023 May the U.S. debt ceiling problem can not be solved in time, the short-term large liquidity shock, commodities downward pressure further increased; 2023 June, in addition to the Federal Reserve outside the world's major Central banks in addition to the Federal Reserve exceeded expectations to raise interest rates, commodities continue to increase the pressure to reduce prices. In this context, the petroleum and chemical industry sentiment index oscillated lower in line with the market law.
June's data showed some positive changes. Downstream near the demand side of the rubber, plastics and other polymers manufacturing industry boom index chain to achieve positive growth, production heat and inventory turnover rate showed significant improvement. Fuel processing industry, chemical raw materials and chemical products manufacturing industry inventory indicators also improved significantly, which indicates that the demand recovery is being transmitted to the middle and upper reaches of the industrial chain, and the de-inventorying cycle is winding down.
Hot Spot Focus
Global inflation cooled down, major central banks exceeded expectations to raise interest rates
In June 2023, global inflation data dropped significantly: compared with May, the US CPI dropped from 4.9% to 4%, the EU CPI dropped from 6.1% to 5.5%, the Canadian CPI dropped from 4.4% to 3.4%, and the Australian CPI dropped from 7.8% to 7%. Because of the debt ceiling issue, the Federal Reserve kept interest rates unchanged for the time being. In addition to the Fed, the ECB, the Bank of England, the Australian Federal Reserve, the Bank of Canada, the Bank of Norway and other interest rate hikes, of which the Bank of England and the Bank of Norway raised interest rates by 50 basis points at a time. Although the Federal Reserve suspended interest rate hikes, but once again emphasize the lower inflation target, the release of "hawkish" signals, the market is expected to continue to raise interest rates in July the Federal Reserve.
Recommendations and tips
Market expectations
Inventory indicators continue to improve, inventory replenishment is expected to gradually warm up.
Risk Tips
The International Meteorological Organization predicts that the probability of the occurrence of moderate intensity El Niño phenomenon in the second half of the year will reach 90%, and the supply of agricultural products and energy in some areas may be affected.
I. Overview of the petroleum and chemical industry boom
In June 2023, the Petroleum and Chemical Industry Prosperity Index fell back to 94.75, down 0.2 percentage points from May 2023, slightly below the normal range, temporarily in the cold range; compared with June 2022, down 2.06 percentage points.
In June 2023, China's economy continued its recovery trend, with the momentum of recovery still weak. According to the National Bureau of Statistics, in June 2023, the manufacturing PMI rebounded slightly by 0.2 percentage points to 49%, still in the contraction zone. Supply and demand in the real estate market in key cities continued to weaken, and the resilience of first-tier cities was better than that of second- and third-tier cities.1.56 trillion yuan of new social financing in May, 1.3 trillion yuan less than the same period last year; 1.36 trillion yuan of new credit in May, 541.8 billion yuan less than the same period last year, lower than the market's expectations. Internationally, in addition to the Federal Reserve, the major central banks exceeded expectations to raise interest rates, in the environment of continued liquidity tightening, commodity prices are still facing downward pressure.
Petroleum and chemical industry sentiment index fell significantly narrowed. Sub-industry point of view, the domestic days of record high temperatures affect the demand for travel, fuel processing industry boom index fell 1.04 percentage points, the largest drop in the sub-industry. Oil and gas extraction industry boom index fell 0.94 percentage points, the boom index is still in the hot zone. Chemical raw materials and chemical products manufacturing industry boom index fell 0.73 percentage points, the smallest decline in the sub-industry. Rubber, plastic and other polymer products manufacturing industry boom index rose 2.02 percentage points from the cold range to the cold range, is the demand for marginal improvement of the recovery signal.
Second, hot spot analysis and future outlook
1. Energy market more favorable plus code natural gas prices rebounded significantly
The international crude oil is more favorable increase. On the supply side, June 5, OPEC + meeting decided that Saudi Arabia in July additional voluntary production cuts of 1 million barrels per day, before the production cut plan extended for one year, the same day Saudi Aramco comprehensively raised OSP (Official Concordant Price), exceeding the market expectations. July 3, Saudi Arabia announced production cuts of 1 million barrels per day of the plan to be extended to August, Russia at the same time also announced that it maintains the production cuts of 0.5 million barrels per day of the plan, August reducing exports by the same amount to reduce supply. Saudi Arabia and Russia's decision reflects OPEC+'s agreement on crude oil price preservation.OPEC+'s production cuts are mainly in response to expectations of a possible oversupply due to the recession, and crude oil supply and demand are still on the tight side. On the inventory front, the U.S. SPR (Strategic National Petroleum Reserve) stockpile declined to 347.2 million barrels as of the end of June, and the outturn data showed that the U.S. Department of Energy had completed the 26.2 million barrels of releases set out in February 2023. Unless oil prices rise sharply, there is a high probability that the U.S. DOE will stop SPR outflows and carry out SPR replenishments in a sequential manner.2021 From October 2021 to the present, the international oil price has been oscillating downward as a direct result of the large amount of U.S. releases of low-priced Strategic Reserve crude oil that has hit the market. As of July 1, 2023, this supply of "cheap crude" has ended.
Natural gas prices bottomed out. European natural gas prices fell sharply in the first half of 2023 due to the warm winter. on June 1, the price of the main TTF (Dutch natural gas futures) contract fell as low as about 23 euros per megawatt (MW). With the northern hemisphere in many areas of record high temperatures, power supply pressure rose, TTF prices also began to bottom out, as of the end of June, the main contract price rebounded to about 34 euros / MW, compared with the beginning of the month rose as much as 33%.
Overall, the international energy supply is still showing a high degree of vulnerability, policy changes in supplying countries, climate anomalies and other factors may trigger an imbalance between energy supply and demand, and low inventory pressure may trigger a rebound in energy prices.
2. El Niño is likely to occur in the second half of the year, be alert to climate anomalies triggered by supply shortages
El Niño phenomenon occurs once every two to seven years on average, generally lasts 9 to 12 months, usually causes an increase in rainfall in southern South America, the southern United States, the Horn of Africa and parts of Central Asia, significantly increasing the number of hurricanes in the Pacific Ocean; the same will also cause severe drought in Australia, Indonesia, parts of South Asia, Central America and northern South America. The International Meteorological Organization, the U.S. National and Atmospheric Administration and other meteorological agencies have published El Niño prediction reports, and the occurrence of El Niño in the second half of 2023 is already a probable event. The weather anomalies accompanying El Niño may affect the supply of some varieties of agricultural products and energy in some regions, resulting in a supply gap.
3. Petroleum and chemical industry outlook
Petroleum and chemical industry boom index in June, although weaker than the ring, the year-on-year decline has expanded, but from the structure of the boom indicators, marginal improvement is obvious. Inventory turnover of the industry rose, downstream rubber, plastics and other polymers manufacturing industry boom index positive growth, indicating that the recovery of demand is supporting the industry's boom index to complete the bottoming out, the recovery trend has been further confirmed. Looking ahead to the third quarter, the international energy shortcomings out, more favorable gradually add code, energy prices or ushered in a rebound, the first half of the cost side factors that continue to impede the growth of the petroleum and chemical industry boom index or from negative to positive. In summary, the petroleum and chemical industry sentiment index is expected to usher in an overall rebound.
Petroleum and chemical industry boom index by the China Petroleum and Chemical Industry Federation and Shandong Zhuochuang Information Co., Ltd. jointly compiled, is the petroleum and chemical industry micro-boom cycle monitoring indicators, including "oil and gas mining boom index" "fuel processing industry boom index "" chemical raw materials and chemical products manufacturing industry boom index "" rubber, plastic and other polymer products manufacturing industry boom index " four sub-index. The prosperity index of petroleum and chemical industry prosperity index is selected to measure the potential output and economic benefits of the industry, including production micro-data and industry efficiency data, production micro-data include: capacity utilization rate, product profitability, finished goods inventory level. The basic data comes from the results of regular research and evaluation established with more than 1,000 enterprises.
Core Summary
Demand recovery, inventory replenishment cycle expected to start
In June 2023, the petroleum and chemical industry sentiment index fell slightly from the previous year, still in the cold range. 2023 first half of the year, in the expectation of economic recession, international commodities are facing downward price pressure; 2023 May the U.S. debt ceiling problem can not be solved in time, the short-term large liquidity shock, commodities downward pressure further increased; 2023 June, in addition to the Federal Reserve outside the world's major Central banks in addition to the Federal Reserve exceeded expectations to raise interest rates, commodities continue to increase the pressure to reduce prices. In this context, the petroleum and chemical industry sentiment index oscillated lower in line with the market law.
June's data showed some positive changes. Downstream near the demand side of the rubber, plastics and other polymers manufacturing industry boom index chain to achieve positive growth, production heat and inventory turnover rate showed significant improvement. Fuel processing industry, chemical raw materials and chemical products manufacturing industry inventory indicators also improved significantly, which indicates that the demand recovery is being transmitted to the middle and upper reaches of the industrial chain, and the de-inventorying cycle is winding down.
Hot Spot Focus
Global inflation cooled down, major central banks exceeded expectations to raise interest rates
In June 2023, global inflation data dropped significantly: compared with May, the US CPI dropped from 4.9% to 4%, the EU CPI dropped from 6.1% to 5.5%, the Canadian CPI dropped from 4.4% to 3.4%, and the Australian CPI dropped from 7.8% to 7%. Because of the debt ceiling issue, the Federal Reserve kept interest rates unchanged for the time being. In addition to the Fed, the ECB, the Bank of England, the Australian Federal Reserve, the Bank of Canada, the Bank of Norway and other interest rate hikes, of which the Bank of England and the Bank of Norway raised interest rates by 50 basis points at a time. Although the Federal Reserve suspended interest rate hikes, but once again emphasize the lower inflation target, the release of "hawkish" signals, the market is expected to continue to raise interest rates in July the Federal Reserve.
Recommendations and tips
Market expectations
Inventory indicators continue to improve, inventory replenishment is expected to gradually warm up.
Risk Tips
The International Meteorological Organization predicts that the probability of the occurrence of moderate intensity El Niño phenomenon in the second half of the year will reach 90%, and the supply of agricultural products and energy in some areas may be affected.
I. Overview of the petroleum and chemical industry boom
In June 2023, the Petroleum and Chemical Industry Prosperity Index fell back to 94.75, down 0.2 percentage points from May 2023, slightly below the normal range, temporarily in the cold range; compared with June 2022, down 2.06 percentage points.
In June 2023, China's economy continued its recovery trend, with the momentum of recovery still weak. According to the National Bureau of Statistics, in June 2023, the manufacturing PMI rebounded slightly by 0.2 percentage points to 49%, still in the contraction zone. Supply and demand in the real estate market in key cities continued to weaken, and the resilience of first-tier cities was better than that of second- and third-tier cities.1.56 trillion yuan of new social financing in May, 1.3 trillion yuan less than the same period last year; 1.36 trillion yuan of new credit in May, 541.8 billion yuan less than the same period last year, lower than the market's expectations. Internationally, in addition to the Federal Reserve, the major central banks exceeded expectations to raise interest rates, in the environment of continued liquidity tightening, commodity prices are still facing downward pressure.
Petroleum and chemical industry sentiment index fell significantly narrowed. Sub-industry point of view, the domestic days of record high temperatures affect the demand for travel, fuel processing industry boom index fell 1.04 percentage points, the largest drop in the sub-industry. Oil and gas extraction industry boom index fell 0.94 percentage points, the boom index is still in the hot zone. Chemical raw materials and chemical products manufacturing industry boom index fell 0.73 percentage points, the smallest decline in the sub-industry. Rubber, plastic and other polymer products manufacturing industry boom index rose 2.02 percentage points from the cold range to the cold range, is the demand for marginal improvement of the recovery signal.
Second, hot spot analysis and future outlook
1. Energy market more favorable plus code natural gas prices rebounded significantly
The international crude oil is more favorable increase. On the supply side, June 5, OPEC + meeting decided that Saudi Arabia in July additional voluntary production cuts of 1 million barrels per day, before the production cut plan extended for one year, the same day Saudi Aramco comprehensively raised OSP (Official Concordant Price), exceeding the market expectations. July 3, Saudi Arabia announced production cuts of 1 million barrels per day of the plan to be extended to August, Russia at the same time also announced that it maintains the production cuts of 0.5 million barrels per day of the plan, August reducing exports by the same amount to reduce supply. Saudi Arabia and Russia's decision reflects OPEC+'s agreement on crude oil price preservation.OPEC+'s production cuts are mainly in response to expectations of a possible oversupply due to the recession, and crude oil supply and demand are still on the tight side. On the inventory front, the U.S. SPR (Strategic National Petroleum Reserve) stockpile declined to 347.2 million barrels as of the end of June, and the outturn data showed that the U.S. Department of Energy had completed the 26.2 million barrels of releases set out in February 2023. Unless oil prices rise sharply, there is a high probability that the U.S. DOE will stop SPR outflows and carry out SPR replenishments in a sequential manner.2021 From October 2021 to the present, the international oil price has been oscillating downward as a direct result of the large amount of U.S. releases of low-priced Strategic Reserve crude oil that has hit the market. As of July 1, 2023, this supply of "cheap crude" has ended.
Natural gas prices bottomed out. European natural gas prices fell sharply in the first half of 2023 due to the warm winter. on June 1, the price of the main TTF (Dutch natural gas futures) contract fell as low as about 23 euros per megawatt (MW). With the northern hemisphere in many areas of record high temperatures, power supply pressure rose, TTF prices also began to bottom out, as of the end of June, the main contract price rebounded to about 34 euros / MW, compared with the beginning of the month rose as much as 33%.
Overall, the international energy supply is still showing a high degree of vulnerability, policy changes in supplying countries, climate anomalies and other factors may trigger an imbalance between energy supply and demand, and low inventory pressure may trigger a rebound in energy prices.
2. El Niño is likely to occur in the second half of the year, be alert to climate anomalies triggered by supply shortages
El Niño phenomenon occurs once every two to seven years on average, generally lasts 9 to 12 months, usually causes an increase in rainfall in southern South America, the southern United States, the Horn of Africa and parts of Central Asia, significantly increasing the number of hurricanes in the Pacific Ocean; the same will also cause severe drought in Australia, Indonesia, parts of South Asia, Central America and northern South America. The International Meteorological Organization, the U.S. National and Atmospheric Administration and other meteorological agencies have published El Niño prediction reports, and the occurrence of El Niño in the second half of 2023 is already a probable event. The weather anomalies accompanying El Niño may affect the supply of some varieties of agricultural products and energy in some regions, resulting in a supply gap.
3. Petroleum and chemical industry outlook
Petroleum and chemical industry boom index in June, although weaker than the ring, the year-on-year decline has expanded, but from the structure of the boom indicators, marginal improvement is obvious. Inventory turnover of the industry rose, downstream rubber, plastics and other polymers manufacturing industry boom index positive growth, indicating that the recovery of demand is supporting the industry's boom index to complete the bottoming out, the recovery trend has been further confirmed. Looking ahead to the third quarter, the international energy shortcomings out, more favorable gradually add code, energy prices or ushered in a rebound, the first half of the cost side factors that continue to impede the growth of the petroleum and chemical industry boom index or from negative to positive. In summary, the petroleum and chemical industry sentiment index is expected to usher in an overall rebound.
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