When China’s representatives began their negotiations on accession to the WTO, I’m afraid it is difficult to predict that the resources owned by Sinopec’s (6.86, 0.01, and 0.15%) industry will be so strained after five years, and the burden of environmental protection will be unprecedentedly heavy.
According to the commitment made at the time of accession to the WTO, China will fully liberalize the petrochemical industry after the end of the five-year protection period. Today, the limit of the end of the protection period for the petrochemical industry has been less than 30 days.
Foreign capital will enter on a large scale
On December 11 this year, China's refined oil wholesale sector will be opened to the outside world, which will also mark the end of the transition period after China's accession to the WTO and the full opening of the domestic oil and petrochemical market.
In recent years, as the global petrochemical market has generally presented a situation of oversupply, the market has become a more important element than technology and capital. Asia, with its rapid economic development, large population, and market development prospect, has become the main area of ​​market competition.
Therefore, in the past five years, foreign oil and petrochemical companies have used their technologies, scale advantages, and rich marketing experience to take advantage of the gradual opening of the Chinese market, adopting flexible and varied strategies such as gradual penetration, point-to-face integration, joint venture financing, and acquisition. Investment in China has made considerable progress.
Professor Zhu He, a professor-level senior engineer at the China National Petroleum and Chemical Corporation (hereinafter referred to as Sinopec) Institute of Economics and Technology, said that the current focus of foreign investment is mainly on the midstream and downstream businesses, refined oil sales terminal areas, and high value-added petroleum petrochemicals and derivatives thereof. In the areas of deep processing and production, some major oil and petrochemical companies in the Middle East and Southeast Asia have also entered the Chinese market. It can be predicted that with the full opening of the domestic market and the fulfillment of the WTO tariff reduction commitments, foreign investment will set off a new wave of investment in China and will develop in the direction of normalization, localization and integration. Petrochemical industry brings greater competitive pressure.
Zhu He believes that under the background of China's economic booming, after the market is opened, foreign capital will enter the market on a larger scale, and many domestic private enterprises will also accelerate the pace of entering the petroleum and petrochemical sector. China's petroleum and petrochemical industry presents a diversified market subject competition. New situation.
Faced with a "no rice" dilemma
With the rapid development of the petroleum and chemical industries, the contradiction between resource shortages has become increasingly prominent, and domestic resources have become increasingly difficult to support the rapid development of the industry.
According to the data obtained by the reporter from the China Petroleum and Chemical Industry Association, since 2003, the international crude oil prices have been rising continuously. This has promoted the development of the petrochemical industry, and its negative effects have gradually emerged. On the one hand, the cost has increased substantially, forcing price increases; on the other hand, price increases have weakened market demand, the space for price increases has narrowed, and industry profits have fallen.
In the first quarter of this year, the national chemical market continued to slump, prices continued to drop, and profits in many industries fell compared to the same period last year. For example, the fertilizer manufacturing industry decreased by 4.7%, the basic chemical raw material manufacturing industry decreased by 10.9%, and the composite material manufacturing industry decreased by 49.8%. In the first half of this year, the national chemical industry's cost-to-cost margin was 5.3%, a year-on-year decrease of 0.46 percentage points. Except for individual sub-sectors such as pesticides, almost all chemical sub-sectors' cost-profit margins were lower than the same period of last year.
At the same time, the Middle East region has taken advantage of inexpensive raw materials and advanced technologies from Europe and the United States and other countries to build large installations and vigorously develop the petrochemical industry. Due to the small market demand in the Middle East, the vast majority of petrochemical products and derivatives in the Middle East are currently exported to all parts of Asia.
According to the calculation of an expert from Sinopec, Saudi Aramco, for example, costs as much as half as much as Sinopec to produce one tonne of ethylene. There is no doubt that once the Middle East petrochemical industry enters China in large numbers, it will have a disruptive impact on China's domestic industries.
Frequent environmental storms
Wang Hao, from the Institute of Economics and Technology of Sinopec, believes that the increase in environmental pressure is also a major problem that the petrochemical industry must face.
According to statistics, last year the whole industry discharged more than 3 billion tons of industrial wastewater and 1.4 trillion cubic meters of industrial waste, resulting in more than 84 million tons of industrial solid waste, which accounted for 16% and 7% of the total industrial "three wastes" emissions respectively. And 5%. At present, the trend of blindly expanding high-energy-consuming and high-polluting industries such as synthetic ammonia, caustic soda, soda ash, calcium carbide and pesticides, dyes, chromium salts, etc., has attracted the attention of environmental protection agencies.
Europe and the United States and other developed countries started earlier in environmental protection and the system is relatively complete. Taking OECD countries as an example, in terms of controlling pollution, on the one hand, they levy environmental taxes that cover a wide range, high tax rates, and have a detailed design of differential tax rates, not only taxing the use of general fuels and transport vehicles, but also carbon dioxide, nitrogen oxides, etc. The general taxation of compounds, sulfur-phosphorus compounds, noise, waste water, etc., covers almost every aspect related to environmental pollution; on the other hand, it reduces pollution to the environment through the establishment of strict product specifications. Europe, the United States, and Canada have issued very strict finished products. Oil quality standards are moving toward ultra-clean fuels. Europe has implemented plans to reduce CO2 emissions in advance.
Wang Hao believes that due to the impact of environmental protection, the market share of different quality products will change. Taking diesel as an example, the market share of products with high sulfur content will gradually decline. In order to meet strict environmental protection requirements, oil and petrochemical companies must increase investment in environmental protection, renovate existing installations, research new technologies, and develop “environment-friendly processes and products.â€
China's five major synthetic resin demand and forecast
Unit: 10,000 tons
Name 2003 2004 2005 2010
PE 880 919 948 1479
PP 699 765 840 1176
PVC 625 701 750 978
PS 367 398 425 530
ABS 254 265 293 329
Total 2826 3046 3256 4492
China is becoming an attractive petrochemical market, with multinational giants laying out China
Three-pronged approach to break the petrochemical bottleneck
To eliminate bottlenecks that restrict the development of the petroleum and chemical industries, we must first place energy conservation in a more prominent position. According to the data released by the National Bureau of Statistics in the first half of the year, the energy consumption per unit of GDP in the industry has actually increased by 3%. Therefore, it is very difficult for the industry to complete the task of reducing energy consumption by 4% this year.
Yang Weicai, vice president of the China Petroleum and Chemical Industry Association, believes that the focus of energy and consumption reduction in the oil and chemical industry must be three-fold. The first is to focus on energy-saving work in high-energy-consuming industries such as synthetic ammonia, oil refining, ethylene, chlor-alkali, soda ash, calcium carbide, and yellow phosphorus. The second is to tie in with the country's efforts to save energy and reduce consumption of 340 companies involved in the petroleum and chemical industries in 1,000 key enterprises. Thirdly, during the “11th Five-Year Plan†period, the state introduced ten major energy-saving projects, which mainly involved the “excess and heat and pressure utilization projectsâ€, “saving and replacing petroleum projectsâ€, “motor system energy-saving projects†and the oil and chemical industry. Four items of energy system optimization (system energy-saving) project should be carefully organized and promoted in the industry.
Secondly, the oil and chemical industry has become very urgent to do a good job of environmental protection. The National "Eleventh Five-Year Plan" proposes that major pollutants should be reduced by 10%, which is an arduous task for the petroleum and chemical industries. To do a good job in the environmental protection of the petroleum and chemical industry, we must quickly rectify the projects that have hidden major environmental risks, supplement and improve the contents of environmental risk assessment, emergency response plans, emergency monitoring systems, and risk prevention measures, and the contents that are incomplete for historical reasons. Unreasonable parks and enterprises must undergo rectification through measures such as new belts, old buildings, relocations, closures, and industrial restructuring.
Third, we must vigorously promote the petrochemical industry to take the road of circular economy. All industries and enterprises in the oil and chemical industry should be guided by the development of circular economy in the formulation of plans to effectively change the mode of growth, to the development of large-scale production, intensification, and industrialization.
According to the commitment made at the time of accession to the WTO, China will fully liberalize the petrochemical industry after the end of the five-year protection period. Today, the limit of the end of the protection period for the petrochemical industry has been less than 30 days.
Foreign capital will enter on a large scale
On December 11 this year, China's refined oil wholesale sector will be opened to the outside world, which will also mark the end of the transition period after China's accession to the WTO and the full opening of the domestic oil and petrochemical market.
In recent years, as the global petrochemical market has generally presented a situation of oversupply, the market has become a more important element than technology and capital. Asia, with its rapid economic development, large population, and market development prospect, has become the main area of ​​market competition.
Therefore, in the past five years, foreign oil and petrochemical companies have used their technologies, scale advantages, and rich marketing experience to take advantage of the gradual opening of the Chinese market, adopting flexible and varied strategies such as gradual penetration, point-to-face integration, joint venture financing, and acquisition. Investment in China has made considerable progress.
Professor Zhu He, a professor-level senior engineer at the China National Petroleum and Chemical Corporation (hereinafter referred to as Sinopec) Institute of Economics and Technology, said that the current focus of foreign investment is mainly on the midstream and downstream businesses, refined oil sales terminal areas, and high value-added petroleum petrochemicals and derivatives thereof. In the areas of deep processing and production, some major oil and petrochemical companies in the Middle East and Southeast Asia have also entered the Chinese market. It can be predicted that with the full opening of the domestic market and the fulfillment of the WTO tariff reduction commitments, foreign investment will set off a new wave of investment in China and will develop in the direction of normalization, localization and integration. Petrochemical industry brings greater competitive pressure.
Zhu He believes that under the background of China's economic booming, after the market is opened, foreign capital will enter the market on a larger scale, and many domestic private enterprises will also accelerate the pace of entering the petroleum and petrochemical sector. China's petroleum and petrochemical industry presents a diversified market subject competition. New situation.
Faced with a "no rice" dilemma
With the rapid development of the petroleum and chemical industries, the contradiction between resource shortages has become increasingly prominent, and domestic resources have become increasingly difficult to support the rapid development of the industry.
According to the data obtained by the reporter from the China Petroleum and Chemical Industry Association, since 2003, the international crude oil prices have been rising continuously. This has promoted the development of the petrochemical industry, and its negative effects have gradually emerged. On the one hand, the cost has increased substantially, forcing price increases; on the other hand, price increases have weakened market demand, the space for price increases has narrowed, and industry profits have fallen.
In the first quarter of this year, the national chemical market continued to slump, prices continued to drop, and profits in many industries fell compared to the same period last year. For example, the fertilizer manufacturing industry decreased by 4.7%, the basic chemical raw material manufacturing industry decreased by 10.9%, and the composite material manufacturing industry decreased by 49.8%. In the first half of this year, the national chemical industry's cost-to-cost margin was 5.3%, a year-on-year decrease of 0.46 percentage points. Except for individual sub-sectors such as pesticides, almost all chemical sub-sectors' cost-profit margins were lower than the same period of last year.
At the same time, the Middle East region has taken advantage of inexpensive raw materials and advanced technologies from Europe and the United States and other countries to build large installations and vigorously develop the petrochemical industry. Due to the small market demand in the Middle East, the vast majority of petrochemical products and derivatives in the Middle East are currently exported to all parts of Asia.
According to the calculation of an expert from Sinopec, Saudi Aramco, for example, costs as much as half as much as Sinopec to produce one tonne of ethylene. There is no doubt that once the Middle East petrochemical industry enters China in large numbers, it will have a disruptive impact on China's domestic industries.
Frequent environmental storms
Wang Hao, from the Institute of Economics and Technology of Sinopec, believes that the increase in environmental pressure is also a major problem that the petrochemical industry must face.
According to statistics, last year the whole industry discharged more than 3 billion tons of industrial wastewater and 1.4 trillion cubic meters of industrial waste, resulting in more than 84 million tons of industrial solid waste, which accounted for 16% and 7% of the total industrial "three wastes" emissions respectively. And 5%. At present, the trend of blindly expanding high-energy-consuming and high-polluting industries such as synthetic ammonia, caustic soda, soda ash, calcium carbide and pesticides, dyes, chromium salts, etc., has attracted the attention of environmental protection agencies.
Europe and the United States and other developed countries started earlier in environmental protection and the system is relatively complete. Taking OECD countries as an example, in terms of controlling pollution, on the one hand, they levy environmental taxes that cover a wide range, high tax rates, and have a detailed design of differential tax rates, not only taxing the use of general fuels and transport vehicles, but also carbon dioxide, nitrogen oxides, etc. The general taxation of compounds, sulfur-phosphorus compounds, noise, waste water, etc., covers almost every aspect related to environmental pollution; on the other hand, it reduces pollution to the environment through the establishment of strict product specifications. Europe, the United States, and Canada have issued very strict finished products. Oil quality standards are moving toward ultra-clean fuels. Europe has implemented plans to reduce CO2 emissions in advance.
Wang Hao believes that due to the impact of environmental protection, the market share of different quality products will change. Taking diesel as an example, the market share of products with high sulfur content will gradually decline. In order to meet strict environmental protection requirements, oil and petrochemical companies must increase investment in environmental protection, renovate existing installations, research new technologies, and develop “environment-friendly processes and products.â€
China's five major synthetic resin demand and forecast
Unit: 10,000 tons
Name 2003 2004 2005 2010
PE 880 919 948 1479
PP 699 765 840 1176
PVC 625 701 750 978
PS 367 398 425 530
ABS 254 265 293 329
Total 2826 3046 3256 4492
China is becoming an attractive petrochemical market, with multinational giants laying out China
Three-pronged approach to break the petrochemical bottleneck
To eliminate bottlenecks that restrict the development of the petroleum and chemical industries, we must first place energy conservation in a more prominent position. According to the data released by the National Bureau of Statistics in the first half of the year, the energy consumption per unit of GDP in the industry has actually increased by 3%. Therefore, it is very difficult for the industry to complete the task of reducing energy consumption by 4% this year.
Yang Weicai, vice president of the China Petroleum and Chemical Industry Association, believes that the focus of energy and consumption reduction in the oil and chemical industry must be three-fold. The first is to focus on energy-saving work in high-energy-consuming industries such as synthetic ammonia, oil refining, ethylene, chlor-alkali, soda ash, calcium carbide, and yellow phosphorus. The second is to tie in with the country's efforts to save energy and reduce consumption of 340 companies involved in the petroleum and chemical industries in 1,000 key enterprises. Thirdly, during the “11th Five-Year Plan†period, the state introduced ten major energy-saving projects, which mainly involved the “excess and heat and pressure utilization projectsâ€, “saving and replacing petroleum projectsâ€, “motor system energy-saving projects†and the oil and chemical industry. Four items of energy system optimization (system energy-saving) project should be carefully organized and promoted in the industry.
Secondly, the oil and chemical industry has become very urgent to do a good job of environmental protection. The National "Eleventh Five-Year Plan" proposes that major pollutants should be reduced by 10%, which is an arduous task for the petroleum and chemical industries. To do a good job in the environmental protection of the petroleum and chemical industry, we must quickly rectify the projects that have hidden major environmental risks, supplement and improve the contents of environmental risk assessment, emergency response plans, emergency monitoring systems, and risk prevention measures, and the contents that are incomplete for historical reasons. Unreasonable parks and enterprises must undergo rectification through measures such as new belts, old buildings, relocations, closures, and industrial restructuring.
Third, we must vigorously promote the petrochemical industry to take the road of circular economy. All industries and enterprises in the oil and chemical industry should be guided by the development of circular economy in the formulation of plans to effectively change the mode of growth, to the development of large-scale production, intensification, and industrialization.
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