What is China's chemical industry chain bearing in this war? Or will it accelerate the structural transformation of China's chemical industry?

at present, the US-Israeli war against Iraq has affected many countries in the Middle East, the Strait of Hormuz has been blocked, the refining capacity in the Middle East has dropped sharply, and the global oil and gas supply has shrunk significantly. The intensity and continuity of this war is forming a systematic impact on the global chemical industry system from the energy side.

The normal capacity of the Strait of Hormuz is 14 million to 19 million bbl/d, accounting for the global seaborne crude oil trade 25% to 30%; Iran's normal export size is 1.6 million to 2 million bbl/d. The war has led to a basic stagnation in Iran's crude oil exports, and Middle Eastern countries such as Iraq have cut production by more 50%. According to JPMorgan Chase, Huitong Finance, Caixin and other institutions, the conflict will lead to a reduction in global crude oil supply in the short term 10% to 15% oil prices are under significant upward pressure.

It is worth noting that there have been reports that Iran is preparing to allow ships outside the United States and its allies to pass through the Strait of Hormuz. If true, the effect of the blockade will be greatly reduced. However, no matter how the short-term situation evolves, the long-term stability of the oil-producing region in the Middle East has been severely shaken, and the structural impact on the global chemical industry chain cannot be underestimated.

2.1 policy background: three reasons drive short-term product restructuring.

There are rumors that in order to ensure the stability of refined oil supply in China, three barrels of oil have been required to appropriately "reduce and increase oil". If it is true, there are three main logic behind it: first, the reduction in global crude oil supply has led to instability in China's crude oil imports, giving priority to short-term risk aversion; second, requiring three barrels of oil to temporarily increase the output of refined oil, suspend or reduce exports, give priority to ensuring rigid domestic demand for gasoline, diesel and aviation coal, and prevent regional "oil shortage"; third, short-term compression of chemical and PX products, more raw materials will be allocated to refined oil production, priority is given to ensuring basic people's livelihood.

2.2 quantitative estimates: chemicals reduced or up to 180000 tons per day

the annual processing capacity of three barrels of oil is insufficient. 0.7 billion tons the current average oil yield is about. 55% to 56% the chemical yield is about. 24% to 26%. Decline by chemical output rate 10 percentage points the maximum adjustment is measured, and chemicals will be reduced in the short term by about 180000 tons/day of output; accordingly, if the oil output rate increases 10 percentage points, it can be increased by about 180000 tons of oil output, with gasoline and diesel being the main increase, followed by kerosene and other products.

It should be noted that actual adjustments will not be made in one step and will usually be made in the form 3%, 5%, 8% and so on gradually advance, chemical reduction will also be a gradual process. The main types of compressed chemicals are ethylene, PX, aromatics. Such as core raw materials, the corresponding downstream products such polyethylene, Polypropylene, Styrene the supply will also decline.

3.1 short-and medium-term impact: raw material tightening, price upward, industrial chain differentiation.

Upstream raw material end, ethylene, PX and other major chemical raw materials market supply decreased, the price probability continues to rise, the trend of profit to the upstream concentration will be further strengthened.

Downstream industry end different types of chemicals will show obvious differentiation: in terms of bulk chemicals, the cost transmission speed of categories with shorter industrial chains such as plastics, chemical fiber and resin is the fastest, and the price rise of raw materials will be rapidly transmitted to the production end, but there may also be a decline in the willingness to receive goods downstream. In terms of fine chemicals and new materials, such products have relatively strong bargaining power and limited short-term cost transmission impact. However, if raw material prices are high for a long time, price fluctuations and structural transformation pressure will gradually appear, coal chemical industry and light hydrocarbon chemical industry, and petrochemical industry is a different industrial chain route but downstream products highly overlap, in the context of oil head chemical cost pressure, the relative competitive advantage will be significantly highlighted, coal route status is expected to be improved in stages.

3.2 long-term impact: forcing industrial structure to accelerate restructuring

in the long run, this conflict is expected to become an accelerator for the structural transformation of China's chemical industry, mainly in three directions:

one of them, diversification of import channels-- In import-dependent industries, the limited supply of raw materials will force the industry to reduce its dependence on a single source in the Middle East and to diversify and regionalize its import layout;

second, coal chemical industry and the rise of alternative routes-- Oil and gas costs continue to rise, oil head chemical pressure, will promote enterprises to accelerate the exploration of biomass, light hydrocarbons and other alternative chemical routes, process route diversification process speed up;

third, supply chain and market restructuring-- If the war develops for a long time and crude oil prices remain high for a long time, the value system of the petrochemical industry chain will be redefined, and the supply of basic chemicals will shrink after the strategic adjustment of domestic refining and chemical integration enterprises in the short term, which will accelerate the deep reconstruction of the overall supply chain, process route and market pattern.

For chemical traders and supply chain practitioners, the most urgent operational focus at present is to closely follow the situation in Hormuz and the actual landing strength of the domestic "reduction and oil increase" policy, dynamically evaluate the supply gap of key raw materials such as ethylene and PX, adjust the inventory strategy and procurement rhythm in advance, and avoid the passive risks brought about by unilateral upward price of raw materials.