Industry News
The booming development of the shipbuilding industry has a bottoming effect on the carbon dioxide market
1： In June, prices in Shandong Province increased by 0.44% month on month, while transaction prices in neighboring provinces showed slight fluctuations in June.
According to information statistics, the market transaction price in Shandong Province in June was 230 yuan/ton, an increase of 0.44% month on month (May) and a decrease of 15.75% year-on-year (June 2023). The transaction prices in Hebei and Anhui provinces have slightly decreased compared to May, while prices in Henan have slightly increased compared to May. However, all provinces have experienced significant price reductions compared to the same period in 2023. This is not just a phenomenon in all the listed provinces, most of the prices in other provinces of China are lower than the same period last year. On the one hand, it is due to the increase in supply and the impact of new large-scale equipment, and on the other hand, the overall economic downturn and the downstream dry ice market's lower than expected performance this year have led to a lack of motivation for price increases.
As a province with large facilities, multiple facilities, and diversified downstream demand, Shandong's prices showed a fluctuating trend in June 2024, with significant fluctuations. The price trends in Shandong and Hebei provinces are roughly the same, mainly due to the cross flow of manufacturers' goods at the border between Shandong and Hebei provinces, resulting in similar price trends in Shandong and Hebei provinces. The market transaction price in Hebei Province in June was 276 yuan/ton, a decrease of 1.78% month on month and 23.55% year-on-year.
The main reason why prices in Henan have been fluctuating at a low level is that some manufacturers still focus on shipping to avoid inventory accumulation. The market transaction price in Henan Province in June was 169 yuan/ton, an increase of 2.42% month on month and a decrease of 22.12% year-on-year. The downstream demand in Jiangsu Province is relatively acceptable, such as welding, dry ice, and large-scale chemical industries, with relatively stable prices and no significant fluctuations. On the one hand, Jiangsu has a large and abundant supply with high costs. On the other hand, the influx of dry ice from other provinces at low prices has intensified the competition for carbon dioxide prices. The market transaction price in Jiangsu Province in June was 260 yuan/ton, a year-on-year decrease of 18.75%
The main reason for the stable operation of transaction prices in Anhui Province is the decrease in supply, which provides some support for downstream demand and favorable price increases. As supply increases, prices will decrease accordingly. The market transaction price in Anhui Province in June was 271 yuan/ton, a decrease of 1.45% month on month and 13.97% year-on-year.
2： Over 70% of global orders in the shipbuilding industry have been secured by China, providing strong support for the market
According to the Ministry of Industry and Information Technology of the People's Republic of China, from January to June 2024, China's shipbuilding completion reached 25.02 million deadweight tons, a year-on-year increase of 18.4%; The newly received order volume was 54.22 million deadweight tons, a year-on-year increase of 43.9%; As of the end of June, the number of orders held was 171.55 million deadweight tons, a year-on-year increase of 38.6%. From January to June, China's shipbuilding completion, new orders, and orders held accounted for 55.0%, 74.7%, and 58.9% of the world's total in terms of deadweight tons, respectively. In the first half of 2024, nearly 70% of global orders were taken by China.
It is reported that in the first quarter of 2024, Jiangsu Province's new shipbuilding orders accounted for over 30% of the global total. The new orders received by the global shipbuilding industry are mainly concentrated in Jiangsu, Liaoning, Shandong, Shanghai, and Zhejiang. Mechanical welding has a certain supporting effect on the carbon dioxide market in Shandong Province and surrounding provinces.
3、 There are many normal manufacturers and large capacity facilities in each province
There are more car manufacturers and fewer parking manufacturers in each province. Shandong Province has facilities of 1 million tons/year for Qilu Petrochemical, 600000 tons/year for Yisheng Chemical, and 500000 tons/year for Jincheng Petrochemical. Jiangsu Province has facilities of 700000 tons/year for Huayang Liquid Carbon, 500000 tons/year for Taizhou Guodian, and 450000 tons/year for Renguo in Hebei Province. These facilities have large production capacity and some companies have expansion plans, resulting in high production capacity in Shandong Province and surrounding areas. Downstream demand, such as mechanical welding, large-scale chemical engineering, and oilfield injection, has a large and diverse demand, but the supply-demand contradiction is often highlighted. Shandong Province and surrounding provinces have fierce price competition and frequent price fluctuations.
4： The majority of parking devices lack clear driving plans, posing uncertainty risks
There are parking maintenance manufacturers in Shandong, Hebei, and Jiangsu provinces, but there are many manufacturers with unclear driving times, which poses uncertainty risks.
The booming development of the shipbuilding industry in Jiangsu Province has a bottoming effect on the carbon dioxide market. However, there are few parking manufacturers and they are located in the northern Jiangsu region. The shipbuilding industry is mainly concentrated near the Yangtze River, so parking manufacturers have little impact on the carbon dioxide market in southern Jiangsu. At present, the supply and demand in Jiangsu Province are weakly balanced, mainly relying on the adjustment of production capacity utilization by car manufacturers to maintain market balance. In July, the market price in Jiangsu remained stable, with an expected price of 265 yuan/ton. Shandong Province has a large production capacity with multiple facilities, and some manufacturers choose to park due to price constraints, with uncertain driving times. The prices in Shandong are expected to fluctuate in July, and the temporary boost in demand from oil fields is expected to boost the market. There is a possibility that the price of carbon dioxide in Shandong may be raised to 240 yuan/ton in July. The market trading atmosphere in Hebei Province is average, and the shipment situation of manufacturers is still acceptable. The market price is expected to be slightly adjusted to 235 yuan/ton in July.
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