Cost support collapse chemical weakness is difficult to change

It is expected that there will still be room for the international oil price to continue downwards in the short term. Brent’s support along the downside will be at the first line of 80 U.S. dollars. Domestic chemicals are dragged down by the overall weakness, but the impact will tend to weaken and the varieties will be slightly different.

Difficult to improve significantly in the fourth quarter

In the fourth quarter, with the advent of winter, the demand for crude oil will rebound seasonally. In addition, the bottoming out of the Chinese economy and the re-fueling of the strategic reserve pool will all increase crude oil demand to some extent. According to the information released by the European Meteorological Bureau and NOAA, the temperatures in Europe this winter will be low, and the UK will experience the lowest temperature in nearly a century. The demand for heating will increase, and due to the mutual sanctions between Russia and the European Union, the European Q4 There will be a slight shortage of natural gas supply, which will push up the consumption of heating oil to a certain extent. Overall, it is expected that crude oil consumption will recover slightly in the fourth quarter.

During the same period, global crude oil supply increased rapidly, reaching a record high of 93.6 million barrels per day in August. Historically, with the arrival of refineries and the arrival of the off-season, most oil fields have been overhauled. However, both Libya and Angola both increased production this year. As a result, OPEC’s overall production rose by 410,000 barrels/day, while US production increased by 250,000 barrels/day, and Russian exports also increased by 380,000 barrels/day. As a result, supply pressure in September was drastic. increase. From the perspective of October and the fourth quarter, the total exports of cargo in the Middle East, Northwest Africa, Russia, and the North Sea continued to increase, and the overall supply pressure remained high. The overall supply pressure in the fourth quarter was hardly noticeable.

Domestic chemicals are weak

Domestic chemicals began to fall back at the end of July. Before the National Day, with the recovery of stocking and the improvement of domestic economic data, it had rebounded. Rubber, PTA, and plastics all rose in different ranges. However, with the sharp fall in international oil prices after the National Day holiday, chemical products retreated, but the decline was slower than before. I expect the impact of oil prices on chemical products will tend to weaken, chemical industry as a whole to maintain weaknesses, but there will be slight differences between varieties.

After the rapid decline in rubber, the main producing countries began to discuss the introduction of measures to maintain the price, the market continued to buy rumors, the short-term spot market prices and domestic and foreign rubber prices have begun to try to rebound, the market's bullish news began to increase. In addition, the rumor that the domestic compound rubber standard will be lowered to less than 88% will support Tianjiao and it is expected that the standard will be introduced by the end of October. The good news is that the US “double reverse” case is advancing and it is expected that this will affect the domestic tire exports to the US market in the recent period will be reduced by 1/3 compared to the normal situation. Russia’s anti-dumping investigations on domestic tires are also in progress, and the situation facing the tire factories in the latter stage will be severe. In the absence of more macro-bearing conditions, natural rubber fell momentum has eased, is expected to maintain the bottom consolidation in the later period, and is expected to rebound in stages.

The overall state of plastic is slightly poor. After entering the month of October, the agricultural film season began to come to an end. The actual demand was generally low, and downstream traders were also less inclined to store their goods. At present, the actual operating rate is only 44%, which is 3% lower than the same period of last year. With the increase of imported waste plastics and the commencement of production of two sets of coal-to-olefins projects in the fourth quarter, the supply pressure is expected to remain weak. After falling below 10,000 yuan, it will continue to test 9,500 yuan/ton.

In terms of PTA, the upstream PX has now fallen to 1058 US dollars / ton, converted PTA costs 5925 yuan, has been higher than the market price. However, PTA still maintained oversupply, downstream polyester polyester prices have continued to fall, the market production and sales situation is not good. The growth rate of terminal textile and apparel exports remained low and there was not much new demand. Overall, PTA supply and demand surplus, weakened cost support, will be the biggest drag on oil prices, will continue to fall in the short term.