On April 2, the PX commodity index was 64.80, unchanged from yesterday, down 36.72% from the peak of 102.40 points in the cycle (2013-02-28), and up 42.26% from the low of 45.55 points on February 15, 2016. (Note: Period refers to 2013-02-01 to date).

Recently, the domestic market price trend of p-xylene has been temporarily stable. Pengzhou Petrochemical Plant has been running steadily in the field. Urumqi Petrochemical Plant has started 50% of its operation. Fuhai Aromatic Hydrocarbon Plant has started a line. CNOOC Huizhou Refinery and Chemical Plant has been overhauled. Hengli Petrochemical PX Plant has been put into operation. Other units have been running steadily for the time being. Due to the increase of domestic market supply of p-xylene, the market for p-xylene has increased. Prices are declining. The opening rate of PX plant in Asia is about 80%. On April 2, the closing price of p-xylene in Asia dropped by 10 US dollars per ton. The closing price is US$1023-1025 per ton FOB in Korea and US$1043-1044 per ton CFR in China. More than 50% of the domestic units need to be imported. The decline of foreign prices has a negative impact on the domestic market price of p-xylene, and the intra market price of p-xylene remains stable.

On April 2, the price of WTI crude oil in May rose to $62.58 per barrel, an increase of $0.99. Brent crude oil in June rose to $69.37 per barrel, an increase of $0.36. The trend of crude oil price rose slightly, which had little effect on the price of downstream petrochemical products and had a stable trend in the price of paraxylene market. Recent textile industry volatility, PTA price trend 3 days lower, the average price of East China in the vicinity of 6600-6750 yuan/ton self-raised, as of 3 days domestic PTA start-up rate is about 75%, polyester industry start-up rate is about 90%, downstream production and sales rate maintained high, but PTA market price changes little, it is expected that PX market prices will remain stable in the later period.

Price Trend

Since March, the domestic acetone market has entered a fast downward channel. Take the market offer in East China as an example: at the beginning of this month, the acetone market in East China offered 3750 yuan/ton, and the domestic acetone market offer has broken 3000 yuan/ton so far. According to the monitoring of commodity data of business associations, petrochemical companies listed 3600 yuan/ton at the beginning of this week and 3000 yuan/ton at the weekend.

II. Analytical Review

Products: Domestic acetone market is weak, the market is difficult to improve, the current market performance is cold, the terminal just need to replenish. Up to now, the factory has maintained a high start-up rate. Only Shiyou of Yangzhou stopped on March 29, but it is not helpful to the current market with sufficient supply, so the supply side is sufficient. But Korean and Thai manufacturers have more maintenance plans in April, and imports are expected to decrease next month. At present, the main negotiation range of East China market is 2900 yuan/ton, the main negotiation range of Yanshan peripheral market and Shandong area is 3000 yuan/ton, and that of South China market is 3050 yuan/ton. Overall, market offers have fallen sharply this week.

Industry Chain: Pure Benzene: Pure Benzene: The recent overall decline in the pure benzene market, the port area of East China is still plagued by the pressure of shipment, the market supply is sufficient, prices continue to weaken, Sinopec listed price implementation of 4650 yuan/ton of spot remittance, Shandong refining prices declined, slightly mainstream shipments in 4200-4250 yuan/ton. Propylene: The propylene market in mid-late March is not hot. After a week or so of supply and demand stalemate, the price of propylene continued to fall, and the mainstream transaction was 6550-7000 yuan/ton by the end of the month. Previous polypropylene futures shocks, spot market boost is weak, it can be said that the market is difficult to change the current situation of the downturn. In April, the fluctuation of downstream and downstream installations in propylene market still exists, and the pressure of supply and demand will gradually decrease. The propylene market is expected to stop falling and recover. However, attention should be paid to the start-up and shutdown of refinery installations, the changes of downstream installations and the market mentality. Downstream terminal construction has been reduced. At present, purchasing is mainly needed. The downstream domestic BPA plant start-up rate is 81%; the acetone cyanohydrin MMA plant start-up rate is 78%; the MIBK start-up rate is 65%; this week the acetone isopropanol start-up rate is 48%. From the overall start-up rate, the performance of the demand side is slightly cold. Especially after the Yancheng Xiangshui incident, most downstream factories entered the stage of parking consolidation and self-checking, so there were insufficient purchasers of large orders entering the market.

3. Future Market Forecast

Oversupply of the market and inadequate terminal start-up are the main reasons for this year’s successive decline in the acetone market. Acetone analysts from business associations believe that the short-term acetone market is difficult to improve. Follow-up attention should be paid to plant maintenance and port inventory. The acetone market will continue to operate in a weak way. It is expected that the acetone market in East China will continue to decline and the market offer will fall to 2700-2900. Yuan / ton.

On March 31, the phthalic anhydride commodity index was 65.69, unchanged from yesterday, down 45.32% from the cyclical peak of 120.13 points (2012-02-28), and up 35.67% from the lowest point of 48.42 on January 21, 2016. (Note: Period refers to 2011-09-01 to date).

Recently, the domestic market price of phthalic anhydride is weaker, the market of phthalic anhydride and phthalic anhydride in eastern China is weaker, downstream factories are in need of purchasing, factory inventory pressure is continuing, high-end transactions are blocked, the mainstream of on-site neighbouring source negotiation is 6500-6700 yuan/ton, the mainstream of naphthalene source negotiation is 6400 yuan/ton; the mainstream quotation of phthalic anhydride market in North China is 6500-6700 yuan/ton, and the market weakness Main, the quotation trend of enterprises slightly declined, downstream construction is not high, on-demand procurement is the main, wait-and-see mentality is strong, domestic phthalic anhydride plant operation is stable, phthalic anhydride spot supply is normal, the market is not good, phthalic anhydride price trend slightly declined.

Recently, the executive price of the upstream product of phthalic anhydride, Sinopec o-phthalic anhydride, is 6800 yuan/ton. The actual market transaction price is 7100 yuan/ton. The quotation is stable and the port is out of stock. The upstream raw material mixed xylene price is stable, the turnover of phthalic anhydride is general, the stock of phthalic anhydride in port is low, the price of phthalic anhydride is temporarily stable, the cost of imported phthalic anhydride is rising, the actual transaction price is discussed in detail, the upstream price trend is stable, and the market price of phthalic anhydride remains weak. DOP prices in the downstream are lower. Recently, in the DOP market in Zhejiang, the quotation of merchants has dropped to 8300-8400 yuan/ton, and the downstream price has slightly decreased. The demand for phthalic anhydride in the upstream is limited. The market price of phthalic anhydride has slightly decreased. It is expected that the market price of phthalic anhydride in the later period will be around 6600 yuan/ton.

In 2018, the U.S. crude oil production jumped to the top of the world again after 45 years. With shale oil production increasing, export volume is expected to approach Saudi Arabia, which is currently the largest exporter in five years.

Japanese media pointed out that the U.S. offensive in pursuit of energy dominance will bring about changes in the balance of power between oil-producing countries in the Middle East and Russia. The pro-Israel Trump regime has steadily strengthened sanctions against Iran, ushering in a historic turning point around geopolitics of energy.

According to the monthly energy report released by the U.S. Energy Information Agency (EIA) on March 26, the output of crude oil in the United States increased by 17% in 2018 compared with 2017, Japan Economic News reported on March 28. Daily output surpassed that of Russia and Saudi Arabia, reaching 10.95 million barrels, ranking first in the world. In the early 2000′s, the United States launched the “Shale Revolution” by establishing the technology to extract oil from deep underground rock formations. The current crude oil production is twice that of 10 years ago.

The Trump government believes that increasing domestic energy production will create more jobs. Through deregulation, shale oil production has been increased. The U.S. Energy Information Agency predicts that the United States will continue to increase production by 2027, with a maximum of 14 million barrels a day.

Increasing crude oil production will expand the influence of the United States on foreign and trade policies. At a meeting in Texas on March 12, U.S. Secretary of State Pompeo stressed that “rich energy will be used as a diplomatic chip to vigorously pursue the national interests of the United States”.

The United States imposes economic sanctions on Iran, Venezuela and other hostile oil-producing countries. According to the US media, about eight countries and regions, such as Japan and China, which are not applicable to US sanctions and can purchase crude oil in Iran, some people in the Trump regime have proposed that the purchase of crude oil will not be allowed after the beginning of May.

Some people interpret that the increase in U.S. production will restrain the rise in crude oil prices, even if Iran’s crude oil production is reduced, the impact on the market is not great.

Trump acknowledged on 25 March that the sovereignty of the Golan Heights seized by Israel from Syria in 1967 belonged to Israel. It also strongly criticized Iran as the backing of the Syrian Assad regime, and its bias towards Israel became more obvious.

Expanding crude oil production can also gradually reduce the trade deficit. Since the former Obama regime lifted the ban on crude oil exports in 2015, U.S. crude oil exports have expanded rapidly. Exports reached 2 million barrels a day in 2018, up 70% from 2017. Export areas include about 40 countries and regions such as Asia, Europe and South America.

The Trump regime hopes to further increase exports. In the Sino-US trade negotiations, China has put forward the requirement of purchasing large quantities of crude oil and other energy resources from the United States. Japan, which will negotiate trade with the United States, may also be forced to expand its purchases.

In terms of diplomacy and trade, the Trump regime intends to use crude oil as a card for its “U.S. priority” policy. It is planned to publicize this achievement and help it win again in the US presidential election in 2020.

In the long run, expanding crude oil production will make the United States “far away from the Middle East”. Trump wants to withdraw U.S. troops in Syria and elsewhere and get out of the Middle East. At the end of 2017, the U.S. national security strategy also put forward the policy of shifting the focus from the Middle East anti-terrorism war to the confrontation with China and Russia. The analysis points out that the alternation of international energy hegemony also contains the danger of side effects such as leading to instability in the Middle East.

According to the latest report released by the U.S. Energy Information Agency, U.S. crude oil production jumped to the top of the world in 2018, 45 years later, according to Lianhe Zaobao.com. In 2017, its crude oil production ranked third after Russia and Saudi Arabia, but with the increase of shale oil production, production increased by about 20% compared with 2017, surpassing the two countries. In the world energy market, the sense of existence of the United States may be further enhanced.

According to a report released on March 26 by the U.S. Energy Information Agency (EIA), US crude oil production is 17% higher than in 2017, reaching an average of 1.95 million barrels per day. Russia’s (10.75 million barrels) and Saudi Arabia’s (10.42 million barrels) output also increased by 2-3% compared with 2017, but the United States grew faster.

According to data from oil giant BP, the United States surpassed Russia and Saudi Arabia in 2014 in terms of production of natural gasoline, including shale gas. This is the more rigorous U.S. Energy Information Agency statistics, since 1973 again jumped to the top.

On March 26, the phthalic anhydride commodity index was 65.69, down 0.33 points from yesterday, down 45.32% from the peak of 120.13 points in the cycle (2012-02-28), up 35.67% from the low of 48.42 points on January 21, 2016. (Note: Period refers to 2011-09-01 to date).

Recent domestic phthalic anhydride market price fluctuations, the East China phthalic anhydride market weak consolidation, downstream factories to maintain just needed procurement, factory inventory pressure continued, high-end transaction hindered, on-site neighbouring source negotiations mainstream in 6600-6800 yuan/ton, naphthalene source negotiations mainstream in 6400-6500 yuan/ton; North China phthalic anhydride market mainstream offer in 6500-6800 yuan/ton, the market weak shock. The price of phthalic anhydride in China is stable, the spot supply of phthalic anhydride is normal, the market is not good, and the price trend of phthalic anhydride remains weak.

Recently, the executive price of the upstream product of phthalic anhydride, Sinopec o-phthalic anhydride, is 6800 yuan/ton. The actual market transaction price is 7100 yuan/ton. The quotation is stable and the port is out of stock. Upstream raw materials mixed xylene price shocks maintain stability, phthalic turnover is general, port phthalic inventory is low, phthalic external quotation rises, import phthalic cost rises, the actual transaction price talks in detail, upstream price trend is stable, phthalic anhydride market prices remain volatile. DOP prices in the downstream are lower. Recently, in Zhejiang DOP market, merchants’quotations have fallen to 8100-8200 yuan/ton, and downstream prices have been declining. Demand for upstream phthalic anhydride is limited. The market price of phthalic anhydride is slightly lower. It is expected that the market price of phthalic anhydride will be around 6700 yuan/ton in the later period.

Price Trend

According to the monitoring data of business associations, as of March 26, the average price of domestic cyclohexanone market was 9,700 yuan/ton, and the domestic market of cyclohexanone continued to decline.

II. Market Analysis

Products: Domestic cyclohexanone market continued to decline, downstream chemical fiber orders intention is not strong, manufacturers continue to decline in external quotations, solvent market just need to purchase, solid single turnover is weak. The mainstream offer of cyclohexanone in North China market is delivered in cash from 1000 to 10200, the mainstream offer in East China market is delivered in cash from 10200 to 10500, and the mainstream offer in South China market is delivered in cash from 10500 to 10700.

Industry Chain: Pure Benzene: Eastern China’s pure benzene trade is on the low side, buying 4650-4700 yuan/ton in March, selling 4710-4800 yuan/ton. Purchase price in April is 4650-4700 yuan/ton and sale price is 4720-4800 yuan/ton. May buy 4670-4700 yuan/ton, sell 4800-4850 yuan/ton. Caprolactam: The mainstream of caprolactam liquid spot market is stable. At present, the polymerization capacity is large, and the caprolactam factory is relatively strong. However, due to the recent limited production and price guarantee of the polymerization plant, the supply and demand of caprolactam are relatively balanced, and the northern part of the spot transaction is weak. The spot price of caprolactam liquids is maintained at 13800-14000 yuan/ton and delivered by acceptance. On the solid side, downstream delivery is cautious, with the price ranging from 1450 to 14600 yuan/ton, which is remitted to us now.

3. Future Market Forecast

Pure benzene market is relatively stable, cost support is still acceptable; downstream chemical fiber market in Nanjing Oriental recently planned maintenance, the demand for cyclohexanone or slightly reduced. Cyclohexanone analysts, business associations, predict that the domestic market for cyclohexanone will continue to fall in the short term.

According to the monitoring of business associations: on March 25, the market of hydrogen peroxide continued to rise, with the average price of 1010 yuan/ton in the domestic market rising by 3.32%.

Towards the end of March, downstream factories resumed operation, terminal demand improved, and hydrogen peroxide market continued to rise. Hebei’s price has exceeded 1000 yuan/ton, and the mainstream price is 1050 yuan/ton, which is 50 yuan/ton higher than last week. Shandong mainstream quoted 980-1010 yuan/ton, the price increased by 80 yuan/ton. Anhui mainstream quoted 1100 yuan/ton, the price increased by 50 yuan/ton.

Business Club hydrogen peroxide analysts believe that: increased demand, improved market turnover, future market hydrogen peroxide market can be expected to rise.

In 2018, the price of lithium carbonate fell sharply, and the lithium industry of Metro Energy (600175) layout was frustrated.

Metropolitan Energy announced in the evening of March 20 that Metropolitan Energy and the former shareholders of Riverford Lithium Industry had recently signed the Agreement between Metropolitan Energy Co., Ltd. and former shareholder Wang Mingyue of Riverford Lithium Industry Co., Ltd. and the management team to terminate the acquisition of shares of Shandong Riverford Lithium Industry Co., Ltd., Metropolitan Energy Co., Ltd., Liang and Guo Chengyun on the termination of the acquisition of Shandong Riverford Lithium Industry Co., Ltd The main content of the agreement is that considering the current market environment and other factors, the two sides intend to terminate the “Agreement on the Cash Acquisition of Shares of Shandong Ruifu Lithium Industry Co., Ltd. by Mei Dunyuan Co., Ltd.” The original management team of the target company repurchases the 56.18% of the above total shares. After the completion of this transaction, Metro Energy also holds 14.86% of the target company’s equity. Metropolitan said that the company has started to negotiate with other original shareholders of the standard company and will withdraw from Riverford Lithium completely after agreements with other parties have been reached.

On March 23, 2018, Mei Dunyuan passed the bill of “Agreement on Mei Dunyuan Company Limited’s Cash Acquisition of Shares in Shandong Ruifu Lithium Industry Co., Ltd.” It plans to purchase 98.51% of the total shares of Shandong Ruifu Lithium Industry Co., Ltd. for 2.9 billion yuan in cash. In 2018, 2019 and 2020, the betting performance of the two sides is not less than 420 million yuan, 450 million yuan and 480 million yuan, respectively.

Metro Source said Wang Mingyue and his management team had to pay compensation to listed companies for their performance in 2018. According to the preliminary audit of Listed Companies in 2018, the performance compensation is about 900 million yuan. According to the original cash acquisition agreement, Metro Energy still has 1 billion yuan of equity transfer to pay to Wang Mingyue and the management team in the next three years.

As for the specific reasons for the termination of the acquisition, Metropolitan explained that since March 2018, when the company signed the relevant equity acquisition agreement with the relevant counterparty, the market environment has changed greatly. In order to terminate the acquisition, the company took into account many factors, such as the target company and the current market environment, and made a decision after demonstration and research, and has already made a decision with the counterparty. Full communication and friendly consultation to reach an agreed result.

On the same day, Metropolitan announced receipt of the Shanghai Stock Exchange’s “Question Letter on the Termination of Metropolitan’s Acquisition of Riverford Lithium Industry”, and the Shanghai Stock Exchange asked about the rationality of the termination of the acquisition, the performance of Riverford Lithium Industry, and the high premium acquisition of the previous listed companies.

It is noteworthy that Metro Source covers real estate, oil, finance, new energy, commerce, hotels and so on. On the evening of July 25, 2018, Metro Source announced that the company intends to transfer the shares of 12 major subsidiaries of its real estate business sector to Deqing Wanli Real Estate Development Co., Ltd. in cash; and to transfer the shares of Metro Source (Singapore) Co., Ltd. The right is transferred to Deqing Caitong International Trade Co., Ltd. in cash. In the future, we will focus on the development of new energy business.

According to Metro Source’s official website, in the field of new energy, the company has initially completed the layout of the new energy automobile industry chain upstream from “lithium carbonate-lithium battery ternary cathode Material-Ternary power lithium battery”.

The company has acquired 60% of Haichuang Lithium Electricity, and currently has 12,000 tons of precursor capacity and 6,000 tons of cathode material capacity. Another 20,000 tons of ternary precursor project and 20,000 tons of ternary cathode materials are under construction. In March 2018, Haichuang Lithium Power Co., Ltd., Meidu, started construction of a new energy lithium battery material project with an annual output of 50,000 tons. After completion of the project, the annual production capacity of ternary precursor is 54,000 tons, that of ternary cathode material is 50,000 tons, and that of anhydrous sulfuric acid is 80,000 tons.

The company has acquired Delanen Power mainly engaged in lithium battery business. By the end of 2017, Delanen has three production bases, Zhangjiagang, Shanghai and Ningbo, with a total capacity of 2.5 Gwh.

Despite the increase in international crude oil prices in 2018, many Latin American countries are still struggling to cope with the debt crisis and oil and gas production is declining. Recent discoveries of oil and gas and licensing rounds in the region have attracted strong growth in foreign investment, which may be the key to the region’s economic recovery.

Argentina: Pushing Shale Development

Argentina is trying to boost oil and gas exploration and production because of high inflation and declining oil production. Argentina has abundant shale reserves. Although in recent years it has also changed from a major net exporter of natural gas to a net importer, the government is vigorously promoting the development of shale resources in order to help the energy industry out of its predicament.

It is reported that the Vaca Muerta shale in Argentina’s Neuken Basin contains 16 billion barrels of oil and 308 trillion cubic feet of recoverable natural gas. Many international oil giants and investors are showing more interest in the area.

In 2017, the German Wintershall Company launched the first of three horizontal directional wells in Bandurria Norte block, Sinaiuken Basin. According to the company, up to now drilling activities are still mainly concentrated in conventional oil and gas reservoirs.

Several oil giants have also cooperated with Argentina National Petroleum Corporation (YPF) in shale exploration. Equinor and YPF signed an agreement that each of the two companies holds a 50% stake in oil and gas exploration in Western Argentina. In addition, major oil and gas giants are investing $1.15 billion in the development of Vaca Muerta reservoir. YPF, Total, Wintershall and Pan American Energy decided to invest jointly. Total owned 41% and was responsible for exploration and development in the east of Aguada Pichana, while BP owned 45% of Pan American Energy and operated the west of Aguada Pichana and the Aguada de Castro block.

ExxonMobil is another oil giant actively involved in the development of Argentina’s Neuken Basin. The company said it has invested more than $500 million in the exploration and development of its Vaca Muerta assets since it entered the region.

Venezuela: ambitious plan

Although Venezuela has the largest oil and gas reserves in the world, it has failed to maintain its position as the largest oil exporter in the Americas. Since President Nicolas Maduro took office in 2013, oil and gas production has fallen sharply. The situation deteriorated further in 2018, with crude oil production falling from 2.15 million barrels per day to 1.25 million barrels per day in the third quarter of 2018, compared with about 3 million barrels per day five years ago.

Recently, the production of overweight crude oil in the Orinoco Belt has been helping Venezuela’s oil industry to survive. Located in Gurigo, Venezuela, the heavy oil belt has the largest oil reserves in the world. By the end of 2017, however, Orinoco’s oil production had fallen to 82,200 barrels a day, down more than 300,000 barrels a day from the previous year. It has been reported that the decline in production is partly due to the decline in the quality of Venezuela’s oil, including high salinity and high water content. Meanwhile, Venezuela National Petroleum Corporation (PDVSA) continues to suffer from debt problems due to its operation and cash flow problems.

However, PDVSA has ambitious plans for the future and expresses its hope to increase Venezuela’s oil production to about 6 million barrels per day by 2019, of which 4 million barrels per day are expected to come from the Orinoco heavy oil belt. The company’s plan calls for a substantial increase in natural gas production by 2019, aiming to reach 10.5 billion cubic feet per day. Meanwhile, by 2019, we hope to achieve the target of 1.3 million barrels per day of oil exports to Latin America and the Caribbean and 3.2 million barrels per day of oil exports to Asia.

Brazil: Deepwater Oil and Gas Favored

Brazil’s subsalt oil remains a target for explorers. As Latin America’s largest country, Brazil’s influence on the future international energy market continues to grow. Fatih Birol, Director of the International Energy Agency (IEA), stressed that the country has set an example for the rest of the world in its “firm and ambitious long-term energy policy, deep-water oil resources development and biofuel production expansion”. According to the IEA, Brazil’s net oil exports are expected to reach 1 million barrels per day by 2022. This is the result of a 50% increase in the country’s oil production over the past 10 years, largely due to the development of deep-water oil resources.

Libra Oilfield is the deepest oil reservoir in the world. It began production in November 2017. Shortly afterwards, the Libra consortium of Petrobras, Shell, Daudal, CNOOC and PetroChina confirmed the commerciality of the northwestern oil and gas reservoirs in the block, known as Mero Oilfield. Petrobras said the new field estimated 3.3 billion barrels of recoverable oil. The development plan for the Muro oilfield in Rio de Janeiro, located in the Santos Basin, includes four new production systems. According to Dodar, Libra will produce more than 600,000 barrels a day in the next few years.

In April 2018, Petrobras announced the start of production of Bzios Oilfield, one of its major subsalt oil projects. The report says four more production platforms are planned to be built by 2021 because of its high production potential.

Guyana: Hope to come back

With ExxonMobil’s major discoveries of oil and gas, Guyana has become a hot spot for oil majors. Guyana is not yet an oil producer. However, Wood McKenzie, an energy consultancy, says it expects to become one of Latin America’s largest producers by 2026, with production expected to reach 350,000 to 400,000 barrels a day.

ExxonMobil’s offshore Liza oil field in Guyana has a resource of 2 billion to 2.5 billion oil equivalents and is expected to start production in 2020. ExxonMobil discovered 59-foot-thick high-quality oil-bearing sandstone in well Payara-2, confirming that it is expected to become the second giant oil field in Stabroek block. The estimated resources of Payara oilfield have increased to about 500 million barrels of oil equivalent.