We expect to maintain steady growth in PE demand in 2014
We expect to maintain steady growth in PE demand in 2014
The demand of ethylene and the macro-economy are closely related to ethylene derivatives. The downstream applications are dispersed in various fields, and the demand is closely related to the macro-economy. The correlation coefficient between the growth rate of ethylene consumption in China and the GDP growth rate is 3.2 (data since 1996). Namely, the fluctuation of GDP growth rate of 1% corresponds to a 3.2 percent fluctuation in domestic ethylene consumption. GDP growth will continue to fall slightly to 7.5 per cent in 2014 (7.6 per cent in 2013). Thus, 7.6 per cent of GDP growth in 2013 should correspond to a 5.0% increase in demand for ethylene. In 2014, the GDP growth rate of 7.5% was equivalent to 4.6% of the growth of ethylene demand. From January to October 2013, the consumption of ethylene was up by 9%. What has led to the growth of ethylene consumption in 2013 to substantially exceed the theoretical growth rate associated with GDP? Will this continue in 2014? Inventory fluctuation to domestic ethylene actual demand growth in 2013 is lower than the apparent consumption growth, actual demand in 2014 is expected to maintain steady growth we think this is mainly because of inventory changes in actual demand with apparent differences in demand. Ethylene normal temperature is a gas phase and high storage cost. Therefore, its storage is usually reflected in the inventory of products such as downstream polyethylene and ethylene glycol. Take the example of polyethylene (58% of ethylene consumption) as an example to analyze how inventory changes can lead to deviations from actual consumption of apparent consumption. According to the statistics bureau, the growth rate of the annual output and apparent consumption of polyethylene (PE) in 2012 was 1.5% and 3.6% respectively. From January to October 2013, it was 8.3% and 9.3% respectively. The PE library has been significantly changed since the fourth quarter of 2011. In 2012, inventories fell sharply by 66%. In 2012, the real consumption rate of PE should be faster than 3.6%. Since 2013, PE inventories have remained low and relatively stable. Therefore, the actual consumption growth rate of January to October 2013 should be lower than 9.3%. That is, the large recovery in the consumption of PE apparent consumption reflects a cycle of inventory. At present, PE stocks are still low, showing that market participants are cautious about macro-economy, and the demand for PE is expected to maintain steady growth in 2014. But does not exclude the traders and processing enterprise expected turnaround, watch the ethylene and PE price movements, a large number of hoarding inventory, make PE stocks rise, leading to PE apparent consumption continue to grow faster than the actual consumption present high growth. Ethylene glycol is the second most common use in the downstream of ethylene, and in 2013 it was normal. Ethylene glycol (ethylene glycol) can increase the annual production capacity of ethylene, which is only a set of 200,000 tons in 2013, and this year, the overall production rate of the domestic ethylene glycol industry is only about 70%, slightly lower than that of last year. In the future, ethylene glycol will expand more, but mostly coal head, it has little effect on the demand of ethylene. Domestic supply: moderate growth in 2014, the growth rate of domestic ethylene production in 2015 began to increase by 8% in 2013, and the estimated 14/15 years were 7% and 11% respectively. In 2014, the oil head is only sichuan ethylene (expected to start production in January). The conservative forecast for coal production includes the MTO devices of xingxing energy and fude energy. In 2015, a large number of MTO devices, including shanxi coking coal and shenhua yulin, are expected to go into production. In contrast, the increase in production capacity may exceed the actual consumption growth rate, resulting in the improvement of the profit space under pressure and the production of the ethylene cycle. Other global ethylene market analysis in the short term, global regions since October appear differentiation, the ethylene vinyl market prices have stronger, weaker north-western Europe, southeast Asia and northeast Asia basically stable. This confirms that ethylene demand is closely related to macroeconomics. Ethylene as raw materials for the global pricing of large petrochemical, regional differentiation of price movements and ethylene large lateral reflection cycle has not arrived, domestic ethylene in the second half of this year's list are now jurisdictions have factors.
