Resolving overcapacity has been listed by the National Development and Reform Commission as one of the six major tasks of 2014, and it is also a problem in the petroleum and chemical industry, which is more prominent under the new normal. Looking back on 2014, the joint efforts of many parties, the supply and demand relationship of some products in the petrochemical industry has eased. In 2015, will this good momentum continue? Will the surplus situation in the whole industry be significantly alleviated? What new problems and new situations will be encountered in resolving overcapacity?
It is understood that in 2014, the momentum of rapid growth of some surplus products in the petrochemical industry was basically curbed and production also declined. Among them, the urea industry withdrew 5 million tons of backward production capacity, 37,000 tons of caustic soda production capacity, 210,000 tons of PVC production capacity, and 1.92 million tons of backward production capacity in the calcium carbide industry. In the first 10 months of 2014, the total fertilizer output decreased by 13.3% year-on-year. The price began to stabilize and the situation continued to deteriorate. The situation of mineral acid and inorganic alkali manufacturing also achieved positive growth in 2014.
According to industry insiders, the results achieved in 2014 to de-capacity are the result of the joint efforts of the government, the market and enterprises. On the one hand, the government has eliminated the enterprises that are environmentally friendly and whose energy consumption is not up to standard by formulating an exit mechanism. For example, in the beginning of 2014, the “Qualification Requirements for Calcium Carbide Industry” announced by the Ministry of Industry and Information Technology, compared with the old version, the intensity of eliminating backward production capacity has increased. On the other hand, market regulation plays an important role. In the case of continued increase in production capacity, the output of fertilizers will not increase or decrease. Although the industry benefits have fallen sharply, this market adjustment mechanism has greatly accelerated the elimination of backward production capacity and is conducive to the healthy development of the industry. The inevitable trend. At the same time, thanks to the continuous breakthrough of technology and the extension of the downstream industrial chain, the optimization of process routes and the development of downstream products have also become a major breakthrough for enterprises to resolve overcapacity.
Zhu Xi, deputy director of the Information and Marketing Department of the China Petroleum and Chemical Industry Federation, told reporters that at present, under the premise of market resource allocation, the task of resolving overcapacity in the industry is still very arduous. Overcapacity industries must not only strictly control the total amount, improve the industry's entry threshold, eliminate backward production capacity, and curb the incremental increase. More importantly, it must optimize the stock, accelerate the integration and development of surplus industries and related industries, and extend and improve. Its own industrial chain is “swelling” for excess capacity.
So how to resolve such a huge capacity stock? I believe that the integration of the two technologies, especially the optimization of the production process, is the dividend point for the stock assets to further gain advantages. This kind of integration and optimization is based on the company's focus on the use and demand of end users. The user's needs are the research and development power of new products, and may also become a new profit growth point for the stock. For example, drip irrigation that has been tried in agriculture this year will not only bring business opportunities to water-soluble fertilizers, but also a good opportunity for PVC pipe utilization. For another example, the construction of multiple new airports and the demand for insulation materials for building energy efficiency may help optimize the stock and consumption of certain industries.
New consumption will become a new engine for the industry. For example, in the methanol industry, which has been deeply immersed in excess mud, the industry has developed more abundantly due to the formation of promising emerging consumer markets such as methanol fuel for vehicles, methanol to olefins, and aromatic hydrocarbons for methanol. Although the current market forecast is different, it is certain that the development of new downstream industries has increased the possible exports for excess capacity.
Some securities companies have predicted that the situation of serious overcapacity in the chemical industry in 2015 will be alleviated. Because the growth rate of fixed assets investment in the chemical industry has provided conditions for de-capacity. Especially in recent years, due to the slowdown in economic growth, the industry's leverage ratio remains high, and the overcapacity in the chemical industry is more serious, directly affecting the return on investment of new projects. The growth rate of fixed assets investment in the chemical industry appeared in 2014. Sliding down. This indicates that the de-capacity in the economic transformation is gradually progressing, and individual sub-sectors are expected to reverse the market. Therefore, the fundamentals of the chemical industry are expected to improve in 2015, and profit indicators are expected to improve. The overall valuation of the industry in the future is likely to pick up.
At the same time, in 2015, some policies that are conducive to the resolution of overcapacity are also worthy of attention. For example, the implementation of the new "Environmental Protection Law" will enable enterprises to make a rational comparison between illegal costs and product returns. Under such circumstances, some backward production capacity that pollutes the environment will naturally voluntarily withdraw, thus improving the market supply and demand relationship. In addition, while the state's decentralization of some industries has increased the macro-regulation of the market, it is more inclined to enable local governments to achieve the status of equal rights and responsibilities when approving projects. This may also improve the approval of some local governments. The phenomenon of the project. The adjustment of export policies such as the elimination of chemical fertilizers in the off-season season and the increase in the export tax rebate rate for some products, as well as the successive application of innovation results within the industry, have also brought more expectation and hope to the industry's efforts to resolve overcapacity in 2015.
It is undeniable that there are still many uncertain factors and challenges in the development of the industry in 2015. The fluctuation of the market will directly affect the process of de-capacity in the industry. Zhu said that China's petrochemical products market is still in a period of volatility, and has not reached stability and balance. This imbalance of supply and demand takes time to adjust and resolve, not at a glance. The so-called frozen three feet, not a cold day, due to the subsequent release of the previous investment in 2015, the pressure of overcapacity is still very large.