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Last year, the price of crude oil also surged. As the petrochemical industry was at the peak of the boom cycle and the downstream demand was strong, the chemical industry passed the cost increase to the downstream through the price factor, and the rise in chemical products was even higher. The gains from crude oil have benefited from it.
As time goes by, the price of oil has soared this year, and the situation in the chemical industry is quite different. It was precisely because of the huge price increase in petrochemical products last year that the price chain was declining in the process of downward transmission. It finally encountered a boycott and the echo was returned to the chemical industry in April this year. Under the influence of many factors such as macro-control and weakening downstream digestion capacity, downstream demand has been curbed and demand growth has slowed down significantly.
Now that it has entered the era of high oil prices, oil prices have been rising for a certain period of time. It is only a matter of time and speed. The petrochemical industry has already crossed the peak of the boom cycle and is in the process of falling back. According to external analysis, the price difference between the main petrochemical products and raw materials in the United States has significantly declined since the beginning of this year, and the growth rate of world oil demand has also dropped to a low level in the past three years. The phase inflection point in the petrochemical industry has apparently emerged.
Under this circumstance, the chemical industry will not be able to take advantage of the cost increase caused by this year's soaring oil prices. Even the simultaneous shift will not be expected. Chemicals will rely more on their own digestion. It can be said that it is time to test the internal strength of chemical companies. The author believes that for chemical industry, first, it is necessary to abandon the extensive business model, strive to save energy and reduce consumption through technological progress and intensified management; second, avoid light-hearted price wars, and it is unrealistic to expect to squeeze competitors in the short term. However, the desire to speed is not achieved, but it is easy to cause losses to both sides, it is best to reshuffle the card through natural survival of the fittest; third is to develop new sources of raw materials, high oil prices bring new opportunities for coal chemical and agricultural and sideline products chemical industry. The economical route will therefore become economical. Methanol to olefins, food ethanol, etc. may be a good opportunity for development.
The soaring price of oil is hitting the chemical industry.
On August 29, the energy futures resumed trading on the New York Crude Mercantile Exchange as a result of the hurricane. Crude oil futures in October opened above US$70 per barrel in the Asian trading session and rose to a record high of US$70.80 per barrel. It fell back at the close; on August 30th, despite the hurricanes, New York light oil October futures closing price reached 69.81 US dollars a barrel, up 2.61 US dollars. Rising crude oil prices and the slowing down of downstream demand have made the chemical industry, which uses petroleum as raw materials, face a difficult situation.