On February 25, Shell released its latest LNG Prospects Report. The report points out that due to strong demand for cleaner fuels in Asia, the use of liquefied natural gas (LNG) continued to grow in 2018, with global demand increasing by 27 million tons to 319 million tons over the previous year. By 2020, global LNG demand will reach about 384 million tons. With the sustained and rapid growth of LNG demand, it is expected that the supply of LNG will be tight in the mid-1920s.

The report predicts that global LNG supply will increase by 35 million tons in 2019, and Europe and Asia are expected to absorb these new supplies completely.

In terms of demand, growth in Asia, especially in China, has been highlighted. In 2018, China’s LNG imports surged by 16 million tons, an increase of 40% over the previous year. “In 2018, Asian demand for LNG surpassed expectations again, and this strong growth is expected to continue. Investment in new supply projects is picking up and more investment will soon be in place. Maarten Wetselaar, executive director of Shell’s natural gas integration and new energy business, said.

On the supply side, Australia’s LNG exports will begin at the end of 2018, catching up with Qatar, the long-term leader, and will increase by 10 million tons in 2019. The two countries are ready to meet the demand for natural gas in Asia’s fast-growing economies to replace coal-fired power generation and heating to improve air quality.

At the same time, the report reminds us that the demand gap between LNG purchasers and suppliers tends to widen. Among them, LNG purchasers are more inclined to sign short-term, small batch, high flexibility contracts, thereby enhancing their competitiveness in the downstream electricity and gas markets. Most suppliers still want to sign long-term LNG sales contracts to obtain financing. Shell pointed out in its report that the difference in demand between buyers and suppliers must be addressed so that project developers can start implementing new projects.

From the current situation of signing trade contracts, the average duration of contracts signed in 2018 is 13 years, more than doubling compared with the six years in 2017, and the total contract volume has also increased more than doubled, reaching 600 million tons in 2018. Although LNG purchasers and suppliers have different tendencies in the way of contract signing, LNG trade activity continues to increase.

Price Trend

According to the price monitoring of business associations, as of February 26, the average price of domestic methanol market was 2 390 yuan/ton, and the domestic methanol market was strong.

II. Market Analysis

Products: Domestic methanol market shows a regional trend, the mainland market performance is strong. Mainland China is still able to move on with the support of olefin extraction, continuing last week’s trend, with a partial increase of 20-70 yuan/ton. Domestic freight rates have fallen a lot, making the arrival cost of consumer land a little looser; northwest guidance price has gone up 50 yuan/ton to 2000 yuan/ton, the mainland may follow up to a certain extent, pay attention to the price dynamics of manufacturers and transmission to the mainland market. On the port side, affected by high reservoir pressure and futures, the overall performance is general and weak shocks are dominant. In the short term, we still need to continue to pay attention to the changes of port inventory. Domestic freight rates for methanol have declined. The range is 10-50 yuan/ton. The freight rates of Inner Mongolia North Line to North Shandong refer to 300-380 yuan/ton, South Line to North Shandong refer to 290-320 yuan/ton, Shanxi part to North Shandong 120-190 yuan/ton, Guanzhong to North Shandong refer to 150-200 yuan/ton and South Shandong 150-190 yuan/ton. Xinjiang refers to 750-780 yuan/ton from North Shandong and Shenhua from Inner Mongolia refers to 350 yuan/ton from North Shandong.

Industry Chain: Formaldehyde: Linyi Formaldehyde Factory has returned to the market one after another, combined with the recent increase in raw material methanol finishing, to provide a certain cost support for the formaldehyde market. The prices of Zibo and its surrounding areas are around 1200 yuan/ton, while Linyi is around 1180 yuan/ton. Acetic acid: The domestic glacial acetic acid market is stable. Because Shunda equipment is overhauled, the market is slightly supported. Enterprise offer is stable for the time being. However, some manufacturers have obvious inventory pressure. Overall, Corporate pressure is not balanced. Downstream buying intention is cautious and general. On-site operation intention is cautious. Dimethyl ether: After the downstream phased replenishment, the overall domestic dimethyl ether Market shipment has weakened slightly, and the overall market price trend will return to rationality in the short term, and it is expected that there will be no lack of short-term expectations.

3. Future Market Forecast

Business Cooperatives Viewpoint: On the positive side, Northwest Guiding Price: Shaanxi-Mongolia Methanol has slightly increased this week, the current North-South Guiding Price is set at 2000 yuan/ton, which is 50 yuan/ton higher than last week; Domestic installations: Mainland based on spring inspection and other factors, and under the influence of environmental protection policies, maintenance enterprises have increased, local supply or contraction in the later period; Olefins: olefins procurement, pre-sale are good, expenditure. Methanol price of propylene raw material. On the negative side, inventory: in the continuous replenishment of port imports, high inventory is difficult to digest in the short term and the storage pressure is large; upstream: at present, some domestic gas projects are restored, and local supply is relatively abundant; freight: recently, the local freight of methanol has fallen significantly, which makes the cost of arrival of consumer goods slightly loose. Methanol analysts at business associations predict that the short-term domestic methanol market will rise slightly.

According to import and export statistics released by the Ministry of Industry and Commerce of India, coal imports from January to December 2018 amounted to 227 million tons, an increase of 29.154 million tons, or 14.7% over the same period last year. Among them, coal imports in December were 19.462 million tons, basically unchanged from the previous year, a slight drop of 0.04%.

In India’s fiscal year, coal imports in the nine months before fiscal year 2018-19 (April-December 2018) amounted to 173 million tons, an increase of 191.34 million tons, or 12.5% over the same period last year.

On February 24, the hydrofluoric acid commodity index was 105.26, which was the same as yesterday. It was 25.04% lower than the peak of 140.43 points in the cycle (2018-02-21), and 96.42% higher than the low of 53.59 points on November 30, 2016. (Note: Period refers to 2011-09-01 to date)

According to statistics, the recent domestic market price trend of hydrofluoric acid continued to decline, as of 25 days, the domestic market price of hydrofluoric acid was 11475 yuan/ton, and the domestic start-up rate of hydrofluoric acid was more than 60%. Enterprises reflected that the current spot supply of hydrofluoric acid in the field was sufficient, the recent situation of goods in the field became worse, some enterprises’hydrofluoric acid inventory increased, and the ex-factory price continued to decrease, but due to the high level of raw material market. Supported by this, the price decline of hydrofluoric acid market is very limited. At present, the mainstream of hydrofluoric acid negotiations in the southern region is about 10500-11500 yuan/ton, while the price of hydrofluoric acid in the northern market is between 11000-12000 yuan/ton. Domestic hydrofluoric acid market prices are lower, spot supply is sufficient, due to the recent lower raw material market prices, fluorite prices fell, lost cost support for hydrofluoric acid, hydrofluoric acid market prices continue to fall.

Recent downstream refrigerant product installations started generally, the demand for upstream fluorite and hydrofluoric acid has weakened, the recent downstream refrigerant trading market has declined, and the price of hydrofluoric acid products has slightly declined. Recent downstream refrigerant market trading market is cool, R22 refrigerant facility starts at 70%, R22 refrigerant facility start-up rate is temporarily stable, the main production enterprise’s bulk water out-of-factory quotation dropped to 17,000-18,000 yuan/ton, but there is no bulk water spot in the production enterprise, mainly a small number of cylinders shipped. In addition, the actual demand side of the market has declined, and the shipment market trend is poor. The domestic market price of R134a is slightly lower, the start-up rate of production enterprises is lower, the market demand for refrigerants is weakened, and manufacturers mainly export their products. However, the on-site transaction price does not change much. Businessmen purchase on demand. Recently, due to the bad impact of purchases, the market demand for hydrofluoric acid upstream has weakened, and the market price of hydrofluoric acid has declined.

Refrigerant on-site transaction prices slightly lower, refrigerant industry equipment start-up rate is low, for the upstream market demand for hydrofluoric acid weakened, coupled with the upstream refrigerant industry to resist the high price sentiment of raw materials, Business Analyst Chen Ling believes that the hydrofluoric acid market will continue to decline, hydrofluoric acid prices will be around 11,000 yuan/ton.

Vadim Yakovlev, the first vice president of Gazprom, said in an internal magazine Thursday that the company expects oil production to grow by 2% in 2019, Reuters reported in Moscow.

Yakovlev said that this forecast means that global oil production will decrease in the first half of this year.

He added that even if OPEC and non-OPEC countries decided to extend the production reduction agreement in the second half of this year, the Russian Natural Gas Industry Corporation would still increase production this year.

According to Dow Jones, a report released Tuesday by the U.S. Energy Information Agency (EIA) predicts that crude oil production in the seven major shale oil producing areas of the United States will increase by 84,000 barrels per day in March to 8,398,000 barrels per day. Crude oil production across the Permian basin in Western Texas and southeastern New Mexico will increase by 43,000 barrels per day, making it the largest shale oil production area.

In order to improve the export system and deepen the reform of “release and control clothing”, in accordance with the provisions of laws, administrative regulations and rules, such as the Foreign Trade Law of the People’s Republic of China, the Regulations of the People’s Republic of China on the Administration of Import and Export of Goods, the Measures for the Administration of Export Commodity Quotas and the Measures for Bidding Export Commodity Quotas, the relevant matters concerning the management of export quotas of goods are

1. Foreign trade operators exporting goods under quota management shall apply to the Ministry of Commerce for export quotas (global or regional quotas) and apply to the Ministry of Commerce for the Export License of the People’s Republic of China (hereinafter referred to as the Export License) by means of quota certificates or quota tender winning certificates. They shall go through customs declaration and inspection and release formalities by means of export licenses.

2. The Ministry of Commerce accepts applications for export quotas of goods for 2019 (excluding quotas allocated through tendering) from November 1 to November 15, 2018. All qualified foreign trade operators may apply to the competent commercial departments or the Ministry of Commerce of the Xinjiang Production and Construction Corps or the provinces, autonomous regions, municipalities directly under the Central Government, cities separately listed in the plan in accordance with the regulations. The Ministry of Commerce will allocate these quotas to applicants by December 15, 2018.

3. The qualifications and procedures for applying for export quotas for licorice, licorice products, rush and rush products allocated through tendering shall be announced separately.

4. The administration of export quotas for phosphate ores and silver shall be suspended from January 1, 2019 and adjusted to permit administration. Any qualified foreign trade operator who needs to export phosphorus ore or silver can apply for an export license on the basis of a valid export contract for goods (silver for export under processing trade shall be handled in accordance with the current regulations) and go through the customs declaration, inspection and release formalities on the basis of an export license.

5. From January 1, 2019, the export quota management of artificial cultivation of Ephedra for medicinal materials will be implemented, and the export ban will no longer be implemented. Qualifications and procedures for quota application shall be announced separately.

Price Trend

According to the data from the business associations’list, the domestic TDI market has been running steadily this week, with an average price of 14066.67 yuan per ton this week. Overall, TDI prices were stable this week.

II. Market Analysis

Products: This week, the domestic TDI market was tidied up slightly. Shandong Dongda-Norway Polyurethane Co., Ltd. reported 13700 yuan/ton; Zhangjiagang Bonded Zone Pan-Asian International Trade Co., Ltd. reported 14500 yuan/ton; Nanjing Carbon Green Chemicals Co., Ltd. reported 14000 yuan/ton.

Industry chain: The price of nitric acid in the upstream of TDI is stable, the average price at weekend is 1475 yuan/ton, and the average price of toluene at this week’s market is 5137.5 yuan/ton. The quotation is stable. On the whole, the upstream market is running smoothly, the downstream market is underdeveloped, new orders are scarce, and the actions of factories are not obvious, which results in TRADERS’cautious wait-and-see.

3. Future Market Forecast

According to the data analyst of business associations, the TDI market is mainly stable at present. The downstream enterprises are facing the upsurge of returning to the market. The overall demand will be improved. However, in view of the fact that most of the stocks are ready before the festival and the short-term digestion of inventory is the main factor, the market is expected to be consolidated.

Iranian Daily reported on February 14. According to the statistics of National Petrochemical Corporation of Iran (NPC), in the 10 months from March 20, 2018 to January 20, 2019, Iran exported more than 17 million tons of petrochemical products with a total value of 9.73 billion US dollars. During this period, Iran’s total petrochemical production was 44.8 million tons, with an annual capacity of 64 million tons. In the previous Iraqi calendar year, Iranian petrochemical products sold a total of 17 billion US dollars, including 12 billion US dollars in exports and 5 billion US dollars in domestic sales.

Alcoa believes global demand for aluminium may grow at the slowest rate since the global recession in 2009, the latest sign of a global economic slowdown, according to foreign media reports recently.

Alcoa Chief Executive Roy Harvey said in a report to analysts that the company expects global demand for aluminium to grow by 3-4% this year, the lowest growth rate since the global market contracted after the financial crisis.

Aluminum is often seen as a barometer of the health of the global economy because it can be used in various fields such as construction, aerospace and automobile manufacturing.

Harvey promised to respond urgently to these developments in the coming year.

Alcoa’s fourth-quarter results on Wednesday showed that fourth-quarter revenue fell 37% from the same period in 2017, but better than analysts’expectations.

Excluding one-off items such as restructuring costs and non-duplicate taxation, the adjusted net income per share of the company was 66 cents, higher than the average expectation of 62 cents.

The free cash flow excluding capital expenditure in the fourth quarter was $387 million, an increase of 27% over the same period in 2017. Alcoa shares fell 1.3% to $28.60 in after-hours trading.

The slowdown in global demand growth reflects an expectation of 4-4.5% growth in China’s demand, which is significantly lower than the 6.5% growth rate predicted by Alcoa in 2016.

The price of LME aluminium has fallen 16% from its peak in early October last year. Alcoa expects aluminium shipments to decrease from 3.3 million tons in 2018 to 2.8 million tons this year.

Harvey said that the company will focus on “what we can control, continue to improve our operations, respond to challenges flexibly, and seize opportunities in the coming year”.

Alcoa also said in its earnings report that the production gap in the aluminium market will expand to 2.1 million tons this year and 1.7 million tons in 2018. The company also expects the alumina market to shift from oversupply to shortage this year.