Elimination and adjustment in response to the refo

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"Elimination + adjustment" in response to the reform of the international refining and chemical market

"elimination + adjustment" in response to the reform of the international refining and chemical market

May 28, 2014

[China coating information] "At present, the demand of international buyers is limited. In the future, Europe, Africa and the Asia Pacific region will become regions to absorb excess refining and chemical capacity. However, compared with the United States and the Middle East, Chinese refineries have no price advantage, and compared with Singapore and South Korea refineries, they have no scale advantage. Therefore, export opportunities will be relatively limited."

on May 20, ESA Ramasamy, global director of strategic oil market development of Platts energy information, introduced to us at Platts energy information 2014 oil seminar

zhouxiaoyi, senior market analyst of Platts' energy information petroleum department, said: "in the long run, the elimination of backward production capacity is the ultimate way out for China's refining and chemical industry, and it also expedites great changes in the production mode of the manufacturing industry." With the continuous expansion of China's refining and chemical capacity, excess refining and chemical capacity has become an urgent problem

according to statistics, China's GDP growth in the first quarter of this year was 7.4%, lower than the annual target of 7.5%. The purchasing managers' index has also been below 50 for four consecutive months. It is expected that the apparent demand growth of oil in 2014 will remain at about 2%, far lower than the 2.3% in 2013. On the other hand, since 2012, China's oil refining capacity has steadily increased by 6% to 7%. The growth rate of refining energy far exceeds the growth rate of demand, and the contradiction between the two is becoming increasingly prominent

in this context, zhouxiaoyi believes that "delaying the construction and commissioning date of new refinery and reducing the operating rate of the refinery will be an effective delaying measure." According to the data released by PetroChina and Sinopec, the overall operating rate of the two enterprises in the first quarter has dropped to below 85%, the lowest level in recent 10 years. However, due to the weak demand for oil, the inventories of various refined oil products in China are still growing year-on-year, including diesel oil, gasoline and aviation coal, which are up by 3%, 25% and 28% respectively. Refining and chemical capacity is still surplus

"in the international market, the demand and price of crude oil also fluctuate in a narrow range, which is a symbol of the stabilization of the oil market." Dave ernsberger, global director of Platts' energy information and oil department, made analysis at the meeting. He believes that, driven by the shale gas revolution in the Americas, the surplus export of refined oil products will have a huge impact on refiners and price systems in Asia and the Middle East without any side effects. Europe focuses on improving energy efficiency. Since 2008, many refineries have closed down, and the refining capacity is decreasing at the rate of 10million barrels per day. The Middle East market is accelerating capacity expansion, which is expected to reach 2million barrels per day by 2020. At that time, the original supplier India may aim its remaining capacity at the Southeast Asian market. The demand for diesel oil in the African market has increased steadily, but the refining and chemical capacity is limited or even negative. The growth rate of energy demand and refining capacity in the Asia Pacific region ranks first in the world

Zhou Xiaoyi's view is that with the deepening of China's energy conservation and emission reduction and ecological civilization construction, China's refineries are vigorously upgrading their refining equipment to meet the production requirements of National IV and national V standard gasoline and diesel. The accelerated pace of oil upgrading will help China's refineries to improve energy efficiency, eliminate backward production capacity that can only produce low-standard gasoline and diesel, adjust the original refining layout structure, and establish an automated and large-scale refining center in the future

vigorously promote industrial upgrading. The experts also mentioned that the national energy administration is trying to eliminate backward production capacity by policy means, which will effectively raise the access threshold for new refining and chemical production capacity and control the expansion of refining and chemical production capacity from the source

in addition, the current price adjustment mechanism for refined oil implemented in China in March, 2013 can timely and effectively reflect the changes in the international crude oil market, and will promote the profitability and development of China's refineries in the future. According to the regular reports of the two major companies, since the third quarter of last year, PetroChina and Sinopec oil refining sectors have achieved turnaround


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