In 2018, it has quietly passed the third quarter. Looking back at the polyethylene market, the competition in petrochemical and coal chemical industry is increasing, the production capacity continues to grow, the pressure on environmental protection policies, and the adjustment of value-added tax and other factors have caused the market to become increasingly stagnant, and the business mentality is confused. In the face of a weak growth economy, what other major factors are affecting the polyethylene pattern?
First, the United States continues to move. After the United States began to implement the 'rate hike' in 2016, the United States released new actions in 2018 and started a trade war against China. As the Sino-US trade war escalated, China’s imports continued to increase. 4. The tariff is levied, and the domestic is more positive and reasonable, and the import and export data both fall back.
At present, the global economic co-recovery has turned into a divergence, and the prospects are facing multiple challenges. The Chinese economy has not been spared. In addition, the Fed’s “increasing interest rate” has been continually affecting the decline of the RMB exchange rate. The domestic deleveraging policy has been implemented too fast, and multiple factors have led to the real economy. Downward, and the pressure continued to rise. Although the crude oil price rebounded, but the downturn in the downstream demand side of polyethylene was transmitted to the production end, the petrochemical inventories increased significantly compared with the same period of last year, and the production and demand both fell significantly. Due to this drag, the polyethylene industry was weak. , showing a shrinking downturn.
Second, the Ministry of Finance adjusts the VAT rate. China will implement a new value-added tax from May 1, 2018. Taxpayers will be subject to VAT taxable sales or imported goods. The original 17% and 11% tax rates are applicable. 16%, 10%. Manufacturing and other VAT rates fell from 17% to 16%. This is the first time since the introduction of VAT, 17% of this basic tax rate has decreased, and the burden on large enterprises has been reduced, and the real economy has been reduced. Increased stamina, but the impact on small and medium-sized enterprises is relatively small, and the polyethylene market is obviously insufficient.
Third, the production capacity continues to increase. In recent years, the production capacity of polyethylene has been increasing. In May 2018, CNOOC Shell 300,000 tons/year linear device and 400,000 tons/year low-voltage device were put into operation, which led to changes in the production capacity of polyethylene, and the South China region became a China's second largest capacity supply area, local supply is sufficient but consumption is limited. At present, 450,000 tons of low-voltage devices have been put into commission production stage, coal production capacity continues to expand, competition with oil-based polyethylene is increasing, impacting the market Low-cost sources of supply, resulting in oversupply of low-end products, dragged down the polyethylene market.
Fourth, the downstream demand has shrunk. Since the implementation of the environmental strict inspection policy in 2017, the small and medium-sized enterprises have been shut down significantly, resulting in a significant contraction of downstream demand. The environmental protection policy continued to be implemented in 2018, as a greenhouse cultivation in Shandong Shouguang and in late August. Seriously affected by the disaster, coupled with the economic downturn, multiple factors have led to the 'Golden Nine' delay in the future, the downstream plant demand started slowly. As the production capacity of polyethylene continues to increase, the market supply exceeds demand is difficult to break.
Throughout the overall situation, the current global economic turmoil continues, and the prospects face multiple challenges. Although China is actively responding, the pressure is still increasing. The petrochemical inventory of polyethylene is slow to consume, and the expansion of equipment has led to increased competition between oil and coal systems. The downstream demand has shrunk, and the 'Golden Nine' failed to arrive as scheduled, resulting in a cautious takeover. The market did not show a sharp rise in the first three quarters. With the start of demand in the fourth quarter, the market is expected to improve, but the overall situation is weak, lack of good. Drive, it is difficult to surpass the price of previous years.