Petrochemical industry: Adjustment and revitalization of petrochemical industry planning comments

Deng Yonghai Securities "petrochemical industry adjustment and revitalization of the plan" issued the "Petrochemical industry adjustment and revitalization planning" on May 18, "planning" is divided into five parts. (1) The present situation and situation of petrochemical industry. China is a large country of petrochemical production and consumption, but facing the low level of intensive development, industrial distribution dispersed, not paying attention to energy conversion efficiency, blindly develop coal chemical industry and so on.　　Therefore, China's petrochemical products consumption is still in the growth period, the long-term existence of oil, fertilizer, pesticide rigid demand, high-end petrochemical products market potential is huge, we must seize the opportunity to speed up the adjustment and revitalization of petrochemical industry, promote the smooth operation of the industry and healthy development. (2) Guiding ideology, basic principles and objectives. Guiding ideology: According to the general requirements of growth, expanding domestic demand and adjusting structure, stabilizing the market of petrochemical products and maintaining the steady growth of industries; relying on large enterprises and industrial bases, according to the integration of refining, park, intensive mode and the development of recycling economy, protect the ecological environment, promote safety production requirements, optimize the Basic principles: adhere to the combination of stabilizing production operation and promoting industry revitalization, insisting on the combination of adjusting product structure and increasing effective supply, insisting on speeding up technological transformation and promoting independent innovation, insisting on implementing major projects and adjusting industrial layout. Objective: 2009-2011, the petrochemical industry maintained a steady and rapid growth.　　2009 strive to achieve smooth operation, after three years of adjustment and revitalization, to 2011, the industrial structure tends to be reasonable, the development of a clear change in the overall strength of a significant increase. The objectives of the plan are specific: 1 The production remains steadily increasing. By 2011, crude oil processing capacity reached 405 million tons, refined oil, ethylene production reached 247.5 million tons, 15.5 million tons respectively. 2 increase the capacity of agricultural support. By 2011, the fertilizer production reached 62.5 million tons (pure), potash production reached 4 million tons (pure), the proportion of high concentration of fertilizers increased to 80%. 3 increase the capacity of agricultural support. By 2011, the fertilizer production reached 62.5 million tons (pure), potash production reached 4 million tons (pure), the proportion of high concentration of fertilizers increased to 80%. 4 The product structure has improved significantly. 2009-year vehicle gasoline all reached the National Ⅲ Standard, 2010 years automotive diesel all reached the National Ⅲ Standard, 2011 Young quality oil yield reached 75%, high-end petrochemical products self-sufficiency rate significantly improved. 5) The technological progress is obviously accelerated. Butyl rubber and other industrial technology breakthroughs, tens of millions of tons of oil refining, million tons of ethylene, large pulverized coal synthetic ammonia and other complete sets of technical equipment to achieve localization, coal oil, olefins, ethylene glycol and other demonstration projects completed and put into production. 6) Energy-saving and emission reduction results. By 2011, the energy consumption of petrochemical industry units increased by more than 12%, sewage, sulfur dioxide and dust and other pollutant emissions reduced by more than 6%, the industry characteristics of pollutant emission control. The comprehensive energy consumption is generally reduced, the standard oil consumption of crude oil refining unit is less than 63 kilograms, the Standard Oil of ethylene unit is less than 640 kilograms, and large coal is combinedThe Ammonia synthesis Unit has a comprehensive energy consumption of less than 1.8 tons Tce. (3) The main task of industrial adjustment and revitalization.　　To maintain the smooth operation of the industry, improve the capacity of agricultural production, and stabilize the demonstration of coal chemical industry, to implement major projects, to co-ordinate the major project layout, vigorously promote technological transformation, accelerate reincarnation of backward production capacity, accelerate ecological environmental protection, support the joint reorganization of enterprises, enhance the capacity of resource protection, improve the (4) Policy measures.　　Perfecting the fertilizer reserve mechanism, grasping the oil reserves, strengthening the credit policy support, perfecting the oil price forming mechanism, increasing the input of technical transformation, supporting the development of foreign resources, implementing fair tax burden policy, perfecting industrial development policy, doing anti-dumping and anti-smuggling work according to law.　　(5) Planning and implementation. Comments: 1. For the next three years the development of the petrochemical industry has given a clear guidance on the next three years, not only to ensure the stable development of the petrochemical industry, but also to promote the revitalization and development of the petrochemical industry.　　While speeding up the construction of major projects, we strictly control the blind expansion of the refinery Ethylene Project, plan merge all the small oil refining and other petrochemical projects, accelerate the elimination of the production of calcium carbide, methanol and other products, encourage the integration and merger of the superior enterprises, and enhance the overall competitiveness of the petrochemical industry. Eliminate backward production capacity. In order to realize industrial upgrading, enhance the stamina of industrial development, and realize energy-saving target in petrochemical industry, we must eliminate the high consumption, backward technology and small scale enterprises. In the plan, for example, "adjusting the structure of pesticide products, the development of high efficiency low toxicity low residue varieties, promote the original drug concentration production", so high toxic pesticides will be phased out; "The next three years to stop the approval of pure expansion of production capacity of coke, calcium carbide and other coal chemical projects, in principle no longer arrange the new coal chemical pilot Project", Thus curbing the blind expansion of the production capacity of high energy consumption products, "eliminated 1 million tons and below low efficiency and low quality backward refining equipment, and actively guided 1 million-2 million tons of refining equipment plan Merge all", through the implementation of Small refinery plan merge all, to achieve large-scale refining industry development.　　"Accelerate the elimination of calcium carbide, methanol and other products of backward production capacity, improve pollution prevention and industrial development level", calcium carbide, methanol and other high-energy, high pollution of the future development of products will be strictly controlled. Support large-scale development and industrial upgrading. To promote the merger and reorganization of large enterprises, optimize the allocation of resources to promote industrial concentration and intensive development. For example, in the plan, it is mentioned that "the appropriate construction of large nitrogenous fertilizer plants in the energy producing areas, replace the backward production capacity, and continue to build Yunnan, Guizhou, Hubei three major phosphate fertilizer base." To realize the large-scale development of China's fertilizer industry, thus contributing to the stability of domestic fertilizer market prices. "Formation of 20 million tons of oil refining base, 11个百万 ton grade ethylene base." The average size of refinery and ethylene enterprises increased to 6 million tonnes and 600,000 tonnes respectively. "Reduce refinery production costs, eliminate small-scale refining, and maintain the stability of the domestic oil market." "Focus on the existing coal-oil, coal-olefin, coal dimethyl ether, coal-made methane gas, coal-ethylene glycol and other five types of demonstration projects, explore coal highEffective clean transformation and petrochemical raw materials to diversify the development of new ways.　　"This shows that the country still attaches great importance to the development of coal chemical industry in China." 2. Petrochemical industry: Large-scale development to 2011, China's crude processing capacity will reach 405 million tons, refined oil, ethylene production reached 247.5 million tons and 15.5 million tons respectively. By 2011, the formation of 20 million tons of oil refining base, 11个百万 ton grade ethylene base. The average size of refinery and ethylene enterprises increased to 6 million tonnes and 600,000 tonnes respectively. Oil products "North oil South Transport" situation has been improved.　　The Yangtze River delta, the Pearl River Delta, the Bohai Sea area industry agglomeration degree further enhances, has built 3-4 20 million ton level refining, 2 million ton grade ethylene production base.　　2011 of crude oil processing and refined oil production will be increased by 18.4% and 18.79% respectively in 2008, the annual growth rate of 5.79% and 5.91% respectively, the annual growth rate is slightly lower than 2001-2008 7.22% and 7.71% growth. The downstream industries of PetroChina and Sinopec will gain a better environment for development. In the refined oil prices, the domestic refining industry has in the past years of losses in the industry, has become a stable source of profit, so the domestic petrochemical companies are trying to expand downstream production capacity, especially to expand refining capacity, in order to ensure the stable profitability of enterprises. According to the company's 2008 annual report, Sinopec is currently under construction of large-scale oil refining ethylene project, including Qingdao Refining, Maoming ethylene and Fujian, Tianjin, Zhenhai large ethylene project; PetroChina is currently under construction of large-scale petrochemical projects, including Dalian Petrochemical, Dushanzi Petrochemical, Guangxi Petrochemical and Fushun Petrochemical Refinery ethylene Project,　　The completion of these projects will further enhance the two companies in refining ethylene production advantage in scale.　　In 2008, Sinopec and PetroChina processed crude oil processing capacity of 169 million tons and 115 million tons respectively, accounted for 49% and 34% of the total domestic crude processing, with the completion of large-scale refining projects in the next few years, as well as small refinery plan merge all, the two companies in the area of refined oil production and sales of the scale advantage will be more obvious. In addition to ensuring the construction of large-scale petrochemical projects, "planning" also proposed to improve the price formation mechanism of oil products, further from the system to clear the direction of oil price reform, for the domestic product price market pricing laid a policy base and for domestic oil price stability,　　To avoid the adverse effect of oil price fluctuation on the economy, the State will also actively increase the oil product national reserves and formulate the system and methods for the commercial reserve of oil products as soon as possible. 3. Fertilizer industry: Relying on regional advantages, the development of nitrogen, phosphorus and potassium industrial base to 2011, China's fertilizer production will reach 62.5 million tons (pure), the 2008 growth of 6.52%, an average annual growth of 2.13%, compared with the 2001-2008 average annual growth rate of 8.71% has declined significantly. We think that this is mainly to eliminate small-scale, backward production capacity, to encourage enterprises with resource advantages bigger and stronger, to achieve optimal allocation of resources, the realization of chemical fertilizer industryOptimize upgrades. To encourage the production of nitrogen fertilizer by clean coal gasification technology. By using the technology of clean coal gasification and energy cascade utilization, the raw material and power structure of the existing nitrogenous fertilizer production enterprises are adjusted, the raw coal is diversified, the cost is reduced, and the large-scale nitrogenous fertilizer production plant is suitably constructed in the energy producing area to replace the backward production capacity. In the listed companies, the skylight, Willow shares and dual-ring technology are using shell coal gasification technology, Hua Lu-sheng used Texaco Coal gasification technology, the use of Hubei is pulverized coal molding technology.　　These companies in the coal-head urea industry, have a certain technical advantages. Relying on phosphate mineral resources, the development of phosphate fertilizer base. Optimize the distribution of phosphate fertilizer resources, promote the utilization of sulfur and medium-low grade phosphate ore, and continue to build the three major phosphate fertilizer bases in Yunnan, Guizhou and Hubei. In the listed companies, the Sky International is one of the largest phosphate fertilizer production enterprises, although the company is now a subsidiary of the Cloud group, but according to the previous integration program, Yun-International award was placed in the listed companies. Hubei is located in Hubei province with relatively rich phosphate resources, the company's phosphate fertilizer business develops rapidly in recent two years, and it expands its own fertilizer industry through continuous acquisition in Sichuan and Guizhou.　　In addition, the six-country chemical industry in Yichang, Hubei, also established six national chemical industry, the development of phosphate fertilizer business. Relying on potash resources to develop potash base. At home and abroad, potash resources exploration and development, scientific planning of Qinghai, Xinjiang Potash base development, strengthen the potash ore symbiosis, associated resources development and utilization. Because China's potash resources are mainly concentrated in the northwest, so China's potash production enterprises mainly concentrated in Qinghai, Xinjiang, involving listed companies including Salt Lake Potash, Salt Lake Group, the Crown agricultural shares, Citic Guoan. "The plan" pointed out that by 2011 China's potash production will reach 4 million tons (fold pure), compared to the current increase.　　Because China's potash fertilizer is still mainly dependent on imports, so the development of potash industry will be supported by the state. 4. Coal Chemical Industry: to encourage clean coal gasification, petrochemical raw material diversification of coal chemical development China is relatively rich in coal resources, and therefore has the advantage of developing coal chemical resources. But in recent years, due to the blind launch of coal chemical projects, some high energy consumption and low value-added projects have been put into operation, which has not produced good economic benefits, and caused environmental pollution.　　Therefore, "planning" in the pure expansion of production capacity of coke, calcium carbide and other coal chemical projects to stop the approval, in principle, no longer arrange a new coal chemical pilot project. In the suppression of high energy consumption, low value-added coal chemical projects launched at the same time, the State also has a technical advantage, can replace the petrochemical coal chemical projects to take the encouragement and guidance measures. The next three years should focus on the existing coal oil, five types of demonstration projects, such as coal olefins, dimethyl ether of coal, methane gas from coal, and ethylene glycol in coal, explore new ways of efficient clean conversion of coal and diversified development of petrochemical raw materials, as soon as possible the demonstration projects of coal oil, olefin and ethylene glycol are completed and put into production.　　In the A-share listed companies, Dan Chemical Technology is actively building the Ethylene glycol project, Weiyuan biochemical, far-hing energy, etc. in the coal production of dimethyl ether project. 5. Maintaining "neutral" investment rating in petrochemical industry--adjustment and vibration of petrochemical industryHing Planning for the petrochemical industry in the next three years of development provides policy support and guidance. As a basic industry, petrochemical industry in the next few years will have a better development prospects, especially in the oil price reform has been straightened out, refining industry to achieve stable profits, petrochemical industry will become an important source of profits. We expect 2009 crude oil prices will show a quarterly increase in the trend, and in the next few years the trend of oil prices are still good, oil prices will lead to a steady increase in the overall profitability of the petrochemical industry.　　We still maintain a "neutral" investment rating for the petrochemical industry. We still maintain an "overweight" investment rating for PetroChina and Sinopec. At the present point of time we are more optimistic about Chinese oil, in the refining business to achieve a stable profit, petrochemical enterprises will be closely related to the price of crude oil, and as the largest oil and gas production enterprises, China's oil performance of oil and gas price sensitivity higher. According to our calculation of crude oil price per increase of 1 U.S. dollars/barrel, PetroChina EPS will increase by 0.018 yuan, gas price per 0.40 Yuan/cu m, PetroChina EPs will increase by 0.09 yuan. In anticipation of higher oil and gas prices, PetroChina's future performance growth will be more obvious.