Due to concerns that the US financial crisis will seriously affect world crude oil demand, international oil prices fell to $70/barrel last weekend (New York Stock Exchange to US$77.70 per barrel, Brent to US$73.65 per barrel, a drop of 17% a week) It has been equated with the lowest level since September 10 last year.
For China's two major oil companies, the decline in oil prices will reverse the trend of refining losses in the first three quarters. However, basic chemical industry will have considerable uncertainties and the pattern of performance differentiation will become even more apparent.
Sinopec had previously set the break-even point at around US$76/barrel. Yesterday, a management person at Sinopec told this reporter that (for now, the drop in oil price) will not play any role for a day or two. The implication is that the average price still depends on the shock pattern, especially whether the overall trend of oil prices in the fourth quarter is at a relatively low level. However, Guo Chen Securities researcher Li Chen believes that the refining profits of the two oil companies may have been confirmed, but it is hard to say whether they will generate huge profits.
Shenyinuoguo Chemical Weekly, which was released on October 7, stated that when oil prices were at US$88/barrel (that is, on October 5th), prices for domestic refined oil-free products had slightly exceeded relevant prices in Southeast Asia for the first time. In the third quarter, PetroChina will have a 50% increase in profits. This is the only company in the 25 major petrochemical companies that has reversed in the chain. If oil prices remain, the domestic refining industry is expected to make a profit in the fourth quarter.
However, the drop in oil prices will affect the oil companies' chemical business such as ethylene and synthetic rubber (information, market). Guo Xin Securities analyst Qiu Wei believes that the future trend of chemical products will weaken with the demand, prompting the industry to enter a disadvantageous environment. China Merchants Securities Zhang Zhihong also believes that the future trade flow in the international market will also have an impact on the chemical industry's upstream products.
In the first week of October, the pesticide glyphosate price fell by nearly 39% to 34,000 yuan/ton. Secondly, the price of urea and natural rubber (information, market) also fell by 15% in the recent week. Nearly 27% rank among the top three decliners. If the demand for the product is in the domestic market and there is a significant drop in the cost of raw materials, there will be room for development in the future, such as some daily chemical products.
For China's two major oil companies, the decline in oil prices will reverse the trend of refining losses in the first three quarters. However, basic chemical industry will have considerable uncertainties and the pattern of performance differentiation will become even more apparent.
Sinopec had previously set the break-even point at around US$76/barrel. Yesterday, a management person at Sinopec told this reporter that (for now, the drop in oil price) will not play any role for a day or two. The implication is that the average price still depends on the shock pattern, especially whether the overall trend of oil prices in the fourth quarter is at a relatively low level. However, Guo Chen Securities researcher Li Chen believes that the refining profits of the two oil companies may have been confirmed, but it is hard to say whether they will generate huge profits.
Shenyinuoguo Chemical Weekly, which was released on October 7, stated that when oil prices were at US$88/barrel (that is, on October 5th), prices for domestic refined oil-free products had slightly exceeded relevant prices in Southeast Asia for the first time. In the third quarter, PetroChina will have a 50% increase in profits. This is the only company in the 25 major petrochemical companies that has reversed in the chain. If oil prices remain, the domestic refining industry is expected to make a profit in the fourth quarter.
However, the drop in oil prices will affect the oil companies' chemical business such as ethylene and synthetic rubber (information, market). Guo Xin Securities analyst Qiu Wei believes that the future trend of chemical products will weaken with the demand, prompting the industry to enter a disadvantageous environment. China Merchants Securities Zhang Zhihong also believes that the future trade flow in the international market will also have an impact on the chemical industry's upstream products.
In the first week of October, the pesticide glyphosate price fell by nearly 39% to 34,000 yuan/ton. Secondly, the price of urea and natural rubber (information, market) also fell by 15% in the recent week. Nearly 27% rank among the top three decliners. If the demand for the product is in the domestic market and there is a significant drop in the cost of raw materials, there will be room for development in the future, such as some daily chemical products.
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