Reuters (London) said in an analysis article May 3 that Iran’s oil exports would fall in May and further deepen the global shortage of oil supplies caused by U.S. sanctions on Venezuela and OPEC production cuts. Washington’s goal after restarting sanctions against Iran is to completely zero Iran’s crude oil exports, a situation the Iranian government has repeatedly said would never happen, but it is ready to reduce oil exports. According to official Iranian sources familiar with the oil policy, Iran’s oil exports could be reduced to 700,000 barrels per day starting in May, with a minimum of no less than 500,000 barrels per day.

OPEC, for its part, said Iran’s oil exports could be reduced to 40.6 million barrels per day. Analysts say Iran is likely to continue to keep oil on transport rights to China and India and smuggle a certain amount of crude oil as it has been under sanctions in the past. “To realize that zero oil exports in May does not mean that Iran will not transport oil to China and India in May, and that Iran’s exports as a whole may remain at 20.55 million barrels/day, but not all of them are merchandise oil,” he told.

” Iran is no longer reporting data such as its oil production to OPEC after the United States restarted sanctions on Iran, and oil export data are unclear. Some Iranian oil exports have shifted to underground channels, making it difficult to obtain real quantitative information. The lack of data is a great headache for OPEC members and allies who are about to develop oil production policies in June, and OPEC has cancelled a meeting in April because of these uncertainties. Saudi Arabia’s National Petroleum Corporation, as a major supplier of Iranian oil exports, is now seeking estimates of Iran’s export volume. Iran’s oil sector, for its part, likes the opacity, and oil minister Zangane says Tehran will continue to sell oil in a variety of ways.

According to the statistics of the National Bureau of Statistics, from January to March 2019, the output of ten kinds of non-ferrous metals in China was 1369,000 tons, an increase of 6.3% over the same period last year. Among them, the output of refined copper was 2.045 million tons, an increase of 8.8%, the output of raw aluminium was 8.567 million tons, an increase of 3.9%, the output of refined lead was 1.429 million tons, an increase of 32.6%, and the output of zinc was 1.36 million tons, a decrease of 5.1%. Alumina output was 18.248 million tons, an increase of 11.1% over the same period last year. Copper output was 3661,000 tons, up 14.4% year-on-year; aluminium output was 104,030,000 tons, up 10.2% year-on-year.

According to the data of China Nonferrous Metals Industry Association, in March 2019, the average spot price of copper in the domestic market was 49,750 yuan/ton, down 6.2% year on year; the average spot price of aluminium was 13,920 yuan/ton, down 4.3% year on year; the average spot price of lead was 16,960 yuan/ton, basically the same as the same period last year; and the average spot price of zinc was 23,550 yuan/ton, down 2.1% year on year.

From January to March 2019, China imported 118,000 tons of unwrought rolled copper and copper, a decrease of 4.3% compared with the same period last year.

May 4, the rare Earth index is 330 points, the same as yesterday, the highest point in the cycle 1000 points (2011-12-06) fell 67%, up from September 13, 2015 to the lowest point of 271 rose 21.77%.

(Note: cycle refers to 2011-12-01 to date). The average price of metal neodymium in rare earth metal is 337,500 yuan/ton, the average price of dysprosium metal is 1.795 million yuan/ton, and the average price of metal praseodymium is 690,000 yuan/ton. The average price of praseodymium neodymium oxide in rare earth oxides is 263,500 yuan/ton, the prices of dysprosium oxide are 1.485 million yuan/ton, the average of oxidized praseodymium is 355,000 yuan/ton, and the average price of neodymium oxide is 267,500 yuan/ton.

The price of praseodymium neodymium alloy in rare earth alloy is 340,000 yuan/ton, and the average price of Dysprosium Ferroalloy is 1.485 million yuan/ton. Recently Rare earth field light rare earth price bottomed out, domestic rare earth market transactions cold, rare earth market most commodity price trend stability, dysprosium terbium varieties by Myanmar mining imports will be limited by the expected impact, market participants on the price of medium-heavy rare earths is more optimistic, holding merchants reluctant, Holmium Ferroalloy and dysprosium ferroalloy prices still have an upward trend, In addition, Praseodymium neodymium series of products market bottom rebound, the field supply is normal, the price of the near-term price slightly increased. Rare Earth market price shock is related to environmental inspectors nationwide, rare earth production has particularity, especially some products have radiation harm to make environmental protection supervision become more stringent. Under strict environmental protection, rare earth separation enterprises in several provinces have been discontinued, resulting in a decline in the market delivery of rare earth oxides, but the price of some rare Earth products has declined. In particular, some mainstream rare earth oxides, supply performance tension, rare earth market part of the commodity price trend is stable, the recent field large Enterprise group Limited production will, rare earth market improve, but for the pricing of products manufacturers are also careful to watch.

Recent Rare Earth export market general, resulting in normal import volume, but due to limited volume, the rare earth market part of the price to maintain stability. Recently, the state Environmental Protection Department strict investigation efforts, the impact on the rare earth industry is greater, rare earth industry started low, the market is cold.

Prior to this, Anhui Province jointly released rare Earth Black Special action documents, due to the increasingly obvious regulatory effect, rare earth industry upstream raw ore resources supply shrinkage, rare earth industry trading market in general. Business Society Rare Earth analysts expect the recent domestic environmental protection is not reduced, coupled with the domestic rectification of the industry order, Myanmar restricted exports, supply significantly reduced, the rare earth industry has a certain positive support, rare Earth products are expected to rise expectations.

Price Trend

According to the monitoring data of business associations, the domestic acetic acid market fell sharply in April. At the beginning of the month, the average price of acetic acid in eastern China was about 3006 yuan/ton, and at the end of the month, it was about 2716 yuan/ton, with a drop of 9.44% in the month. At present, the quotation in Henan is about 2400-2450/ton; in Shandong is about 2650-2750 yuan/ton; in Hebei is about 2600-2650 yuan/ton; in Shaanxi is about 2200 yuan/ton; in Jiangsu is about 2600-2700 yuan/ton; in Zhejiang is about 2800-2850 yuan/ton; in South China, the quotation is about 2800-2850 yuan/ton, which is 40.83% lower than that in the same period last year.

II. Cause Analysis

Products: The domestic acetic acid market continued to decline in April. Towards the end of the month, due to logistics and transportation constraints and other factors, the downstream delivery intention was not high, and acetic acid production enterprises began to sell at lower prices. The overall supply in the industry exceeded demand and the export side had not yet been well supported. Affected by the low price of acetic acid from other places, enterprises in North China are active in delivering low-price acetic acid; in East China, due to the downstream demand downturn, enterprises often downgrade their quotations; in South and Northwest China, due to logistics and transportation constraints, the delivery is flat; in Central China, acetic acid storage pressure is high, and enterprises are more profitable to deliver goods. In terms of start-up, Yankuang Cathay Pacific 1.1 million tons/year plant overhaul is expected to resume in early May; Nanjing BP 500,000 tons/year plant overhaul is expected to resume in early May; Hebei Jiantao 500,000 tons/year plant overhaul is completed within a month, and now normal production; Shanghai Wujing 250,000 tons/year plant resumes production within a month; the overall start-up rate is about 80%, and the total domestic acetic acid production is about 580,000 tons.

Industry chain: In the upstream, domestic methanol market rose first and then depressed. Affected by the spring inspection in Northwest China at the beginning of this month, the supply of methanol industry as a whole was tightened and the price went up slightly. After mid-ten days, the trend of methanol market in the mainland was weak, the mood of receiving goods in some downstream areas was not high, the demand performance was not good, and the price continued to decline. At present, the average price of acetate industry is about 2210 yuan/ton; the overall weak operation of acetate industry Insufficient, weak gas purchases in the industry, Yankuang and Huayi Ethyl Acetate Unit are about to resume production, Celanese Ethylene Acetate Unit has production plans; PTA market lacks clear good news stimulation and demand is flat, some devices will be restarted soon, short-term shock adjustment.

International: North American acetic acid market talks are weak, slightly declined in the month, currently about 555 US dollars per ton; Asian acetic acid market affected by the decline in the Chinese market, fell sharply in the month, the current quotation is 370-430 US dollars per ton; European acetic acid market performance is stable in the month, currently around 695 Euro/ton.

3. Future Market Forecast

At present, the domestic acetic acid price is low for a long time, the profit margin of enterprises is insufficient and the profit is still yielding to the shipment. Although downstream industries such as ethyl acetate, vinyl acetate and PTA are about to resume production, the demand for acetic acid is somewhat driven, but the market as a whole is still oversupply, the logistics transportation is limited during holidays, and the trade in the industry is flat. Acetic acid analysts from business associations predict that the acetic acid market will remain weak during the May Day holiday, and may rise slightly after May Day.

From April 20 to 21, the first China New Energy (Methanol) Intelligent Industry Conference was held in Beijing. The information conveyed at the meeting shows that methanol as raw material and power fuel will have important practical significance in accelerating the upgrading of traditional industries, realizing energy diversification and green low-carbon development in terms of macro-policy and micro-industry development. It marks that the big ship of “methanol economy” is sailing in an all-round way.

According to the statistics of Methanol Age Alliance, China’s methanol production capacity reached 90 million tons in 2018, accounting for 60% of the world’s total production capacity; domestic demand for methanol was 73.85 million tons, and China has become the world’s largest producer and consumer of methanol. In this regard, Jin Yong, academician of the Chinese Academy of Engineering and professor of Tsinghua University, said that as a chemical raw material, methanol can not only produce “triene”, “triphenyl”, “formaldehyde” and dimethyl ether, but also be used as hydrogen storage material, which has a wide range of uses. As a power fuel, methanol has not only guaranteed resources, but also good environmental protection performance. In use, due to full combustion, CO and hydrocarbons in exhaust gas are reduced by 55%~90%, energy conversion efficiency is high, CO2 emissions are low, and the cost of methanol as a vehicle fuel is relatively low. The key point is that the technology has matured, and methanol-powered passenger cars have been used in methanol vapor in Shanxi, Guizhou, Shaanxi and other provinces. Vehicle pilot cities have been put into operation with good results.

It is understood that one month ago, the Ministry of Industry and Information Technology, the National Development and Reform Commission and other eight ministries jointly issued the Guidance Opinions on the Development of Methanol Automobile Applications in Some Areas. The Guiding Opinions pointed out that in order to promote the transformation and upgrading of traditional industries, accelerate energy diversification and meet the requirements of clean new energy vehicles development, M100 methanol vehicles will be accelerated in Jin, Shanxi, Guizhou and Gansu provinces, undoubtedly injecting new vitality into the next development of methanol vehicle fuel and providing favorable policy guarantees.

“This is the most distinctive position given by eight ministries and commissions on methanol as a new energy source, and the best result of the industry’s efforts for more than 30 years.” Jiang Lianbao, Deputy Secretary-General of the National Technical Committee for Alcohol and Ether Fuel Standardization, told reporters.

In his speech, Zhang Yousheng, deputy director of the Energy Institute of the National Development and Reform Commission, stressed that, firstly, accelerating the application of methanol automobiles is of great significance, which is crucial for ensuring energy security, promoting the upgrading of traditional industries and fostering new economic growth points; secondly, the development of methanol automobiles is consistent with the implementation of the concept of green development, and its popularization and application will certainly promote the development of green cycle and low carbon in China; thirdly, the promotion of methanol Auto The application of motor methanol automobiles should be gradual and not rush to the top.To further study the health impact of methanol automobile exhaust, we should gradually improve the supporting service system, accelerate the construction of methanol Automobile standard system, and ensure that the emission of methanol automobile meets the standard throughout the life cycle.

It is understood that the meeting also held the Ganzhou Methanol Intelligent Industrial Park Launching Ceremony and the signing ceremony of related enterprises. The Industrial Park has invested more than 10 billion yuan in new energy and new energy automobile industry, which has become the most powerful response to the “Guidance” of 8 ministries and commissions and the promotion of downstream methanol application.

Titanium is less than 57% of iron, but it has the characteristics of high strength, high temperature resistance and corrosion resistance. It is called “marine metal” and “space metal” and so on. It is an important and supporting material for advanced national defense equipment and important projects of national economy. On April 15, the 17th National Symposium on Titanium and Titanium Alloys was opened in Ningxia, sponsored by China Nonferrous Metals Society and sponsored by Nanjing University of Technology.

With the theme of “innovation, development and application”, this conference has conducted extensive and in-depth exchanges and discussions on the latest development, research hotspots and development priorities of titanium science and technology in recent years in China, attracting more than 70 units from China Nonferrous Metals Society, Nanjing University of Technology, Baoti Group, Northwest Nonferrous Metals Academy and China Shipbuilding Heavy Industry Group to engage in titanium and titanium. Six academicians and more than 530 experts and scholars have studied alloy metallurgy, materials, manufacturing, aerospace, marine engineering, petrochemical, biomedical and other related application fields.

“In recent years, titanium alloys and industry in China have made great progress. They have been widely used in chemical industry, aviation, aerospace, warships, nuclear power, biomedical and other fields. They are key materials for improving equipment performance, important supporting materials for modern national defense construction and indispensable important materials for national economic development.” Academician Zhou Lian, part-time professor and honorary chairman of the conference of Nanjing University of Technology, said that even in the field of daily necessities, titanium is often seen, including high-end cooking utensils, mobile phones, luxury goods and so on.

“In 2018, the output of titanium alloy in China was 60,000 tons, accounting for 0.006% of steel, but the price was 16.9 times that of steel. Low yield and high unit price are serious problems in the application of titanium and titanium alloys. Professor Chang Hui, Vice-Dean of Material College of Nanjing University of Technology, believes that reducing the cost of titanium alloy materials by more than 50%, increasing the utilization rate of titanium alloy materials to more than 90%, increasing the amount of titanium alloy by 5-10 times, reaching 300-600,000 tons/year is the goal of the next 5-10 years.

Crude oil has performed particularly well in this round of commodity rallies. Since late December 2018, Brent crude oil futures main contracts have increased by more than 50%. In the same period, domestic energy futures followed closely, while A-share petroleum and petrochemical sector performed slightly worse. Analysts said that short-term geographic factors will reduce crude oil supply, shale oil investment will reduce this year’s growth rate of shale oil production, if OPEC production reduction can be maintained, future oil prices are expected to continue to rise, which may boost relevant stocks.

Weak and weak

Since the rebound of international crude oil futures in late December 2018, it has embarked on a unilateral upward journey. According to Wenhua financial and economic data, as of April 25, Brent crude oil futures contracts reached a maximum of $75.59 per barrel, up 50.52% from the low of $50.22 per barrel on December 26, 2018, and the largest increase in NYMEX crude oil contracts was 57.22% over the same period.

Domestic energy futures followed closely. Since the low in late December last year, the main contract ranges of domestic crude oil, fuel oil and asphalt futures have increased by 40.81%, 33.16% and 44.92% respectively.

In contrast, in the A-share market, the increase of Petrochemical Index is not ideal. Wind data show that the Petrochemical Index (CITIC) has rebounded from its low on January 3, reaching a stage high on April 8, with a maximum range of 31.57%. Since then, it has maintained a shaky adjustment, closing on April 25, with a cumulative increase of 21.83% since the low, while the Shanghai Composite Index has risen 25.26% since this year.

Yang Owen, an energy industry analyst at Chuancai Securities, said that Brent and NYMEX crude oil prices have been rising recently, driven by the decline in EIA crude oil inventories and the decline in the number of drilling rigs in the United States. In addition, Schlumberger judged in his quarterly report that investment in exploration and development in North America would decline by 10% in 2019 due to rising investment costs and slowing technological progress, which was confirmed by several declines in drilling rigs in North America this year.

Oil prices still have upward momentum

As the top of the energy industry chain, the price of crude oil affects the whole body. Usually, rising oil prices will lead to higher prices of base oil, additives, logistics and transportation costs in downstream related industries.

Wind data show that among the constituent stocks in China Petrochemical Index (CITIC), international industry has increased the most since this year, reaching 156.16%, which is the only stock in the plate that has more than doubled its growth rate; Intercontinental Oil and Gas, Satellite Petrochemical, Maohua Shihua, Tianke, Tongkun, Petrochemical Oil Suit, Xinchao Energy and Sanhongpu have maintained their growth rates in the range of 90% to 50%.

According to Yang Owen, Schlumberger judged in his quarterly report that North American exploration and development investment would fall by 10% in 2019 due to rising investment costs and slowing technological progress, which was confirmed by several declines in drilling rigs in North America this year.

“If oil prices rise in the later period, shale oil increment will also be affected by the above two reasons. The growth rate of production may lag behind that of previous years. In addition, the deadline for the US exemption from Iranian energy exports is approaching, and India has suspended its order for Iranian crude oil in May. It is expected that other exempted countries and regions may also experience this phenomenon. Short-term geographic factors will reduce crude oil supply, shale oil investment will reduce this year’s shale oil production growth rate, if OPEC production reduction can be maintained, oil prices will be affected by many factors rise. Yang Owen said.

In addition to fundamentals, Li Yanjie, chief analyst of energy and chemical industry at CITIC Construction Investment Futures, said that domestic industrial value added and fixed asset investment growth had rebounded, and the recovery of the economy was also good for commodities. Overall, the macro and oil market fundamentals are good, and short-term oil prices are expected to remain strong.

U.S. Secretary of State Pompeo announced Tuesday that “all Iranian oil buyers will stop importing from May 3, otherwise they will be subject to U.S. sanctions”. The market was frightened by media warnings ahead of time, and global oil prices surged more than 3% on Monday, reaching their highest level in nearly six months. The U.S. government has imposed 25 rounds of sanctions against Iran over the past two years, targeting nearly 1,000 individuals and entities. “Trump has become the biggest influencing factor in the global oil market,” Lin Boqiang, Dean of China Energy Policy Research Institute of Xiamen University, told the Global Times on the 22nd that if the United States really tries to reduce Iranian oil exports to zero, the blow to the Iranian economy can be described as “catastrophic”. Earlier, Iranian President Ruhani and military generals had threatened to block the Strait of Hormuz if Iran could not sell oil. Geng Shuang, spokesman for China’s Foreign Ministry, said at a regular press conference on the matter on the 22nd that China has consistently opposed the implementation of unilateral sanctions and so-called “long arm jurisdiction” by the United States. China’s cooperation with Iran is open, transparent, reasonable and legitimate, and should be respected. The Chinese government is committed to safeguarding the legitimate rights and interests of its enterprises and is willing to play an active and constructive role in promoting the stability of the international energy market.

On the morning of the 22nd, the White House said in a statement that Trump had decided not to reissue the exemption clause when it expired in early May. “The Trump Administration and our allies are determined to maintain and expand the greatest economic pressure on Iran in order to put an end to the political authority threatening the United States, our partners and allies and destabilizing activities in the Middle East.” The news immediately raised concerns about the oil market, with crude oil futures up 3.2% to $74.30 a barrel.

Later, at a news conference, Pompeo said that the goal of the United States is to achieve “zero export” of Iranian oil. How long this zero export policy will last depends entirely on Iranian leaders.

U.S. President Trump then tweeted that Saudi Arabia and other OPEC members would “make up” for the lack of oil supply caused by sanctions against Iran. Saudi Arabia’s energy minister also said on Monday that the country would coordinate with oil producers to ensure adequate supply for consumers and unbalanced global oil markets.

The Trump administration resumed sanctions against Iran after withdrawing from the Iranian nuclear agreement signed in 2015 last May. Last November, the United States granted six-month exemptions to eight economies (China, India, Japan, South Korea, Turkey, Italy, Greece and Taiwan, China) for importing Iranian oil, allowing them to find alternative channels for importing oil. Since November last year, Italy, Greece and Taiwan, China, have completely stopped importing oil from Iran, but five other economies have continued to import oil, while calling on the United States to extend exemptions. It is unclear whether these economies will be subject to U.S. sanctions if they do not immediately stop importing oil from Iran on May 3, or whether some of them will be given a buffer period to gradually reduce imports.

According to the Financial Times, this is only the latest step by the United States to increase pressure on Iran. Earlier this month, for the first time, the United States formally identified the Iranian Islamic Revolutionary Guard as a “terrorist organization”. Iran announced on the 21st that Salami will succeed Jafari as commander of Iran’s Islamic Revolutionary Guard, wondering whether it is related to the U.S. sanctions.

Reuters reported in Singapore on April 22 that oil prices rose early Monday, with Brent crude oil futures reaching their highest level since November last year, driven by a decline in U.S. drilling activity and continued OPEC production cuts.

At 00:28 GMT, Brent crude oil futures reached a high of $72.58 a barrel, up 0.8% from its last close in November 2018.

West Texas Intermediate Crude Oil (WTI) futures were trading at $64.55 a barrel, up 0.9% from the previous settlement price.

Stephen Innes, head of trading at SPI Asset Management, said, “The path with the least resistance is still high (oil prices are rising), pointing out that the tight market is caused by the decline in Saudi Arabia’s supply, the decline in the number of American drilling wells and the disruption of Libya’s supply to Venezuela.

In its weekly report Thursday, General Electric’s Baker Hughes Energy Services said U.S. energy companies last week reduced the number of oil rigs by two to 825.

Outside the United States, the Organization of Petroleum Exporting Countries (OPEC) has been taking the lead in reducing oil supply since the beginning of this year in order to tighten the global oil market and boost crude oil prices.

Brent crude oil prices rose by more than a third in 2019, while West Texas intermediate crude oil prices rose by more than 40% over the same period.

Since late March, good news such as the commissioning of 600,000 tons/year MTO plant in Inner Mongolia, spring overhaul and phased replenishment of some downstream enterprises in Jiutai have been gradually exhausted. In addition, the MA market has continued to weaken, and the mentality of some operators has turned weak. In the absence of obvious positive factors, the market rally temporarily came to an end. From last Friday to now, southern Shandong has fallen 110 yuan/ton, northern Shandong 90 yuan/ton, Shanxi 80 yuan/ton, Taicang 50 yuan/ton and Guanzhong Shaanxi 110 yuan/ton.

We believe that the market downturn is reasonable. In recent years, the policy of supply-side reform and environmental safety inspection has been implemented step by step. The utilization rate of methanol and related enterprises has been effectively improved. The regional supply and demand structure has been gradually optimized. Industrial profits have been allocated reasonably in stages. The first quarter is mostly the profit cycle of upstream enterprises, while the profits of upstream enterprises have gradually returned in the second quarter, and the profit space of downstream enterprises has gradually increased. At present, industrial profits are shifting downstream. In the first quarter of this year, the profit margins of upstream enterprises are more than 100-700 yuan/ton, while downstream enterprises are only 10-600 yuan/ton. But since April, upstream profits have shrunk, ranging from 50-150 yuan/ton. Downstream profits are gradually rising. The methanol industry is carrying out reasonable “macro-control”, which conforms to the “natural law” of many years.

Is the market really “horrible”? Is short-selling really risky? We believe that this is not the case.

It is noteworthy that both the outside and the inland arbitrage windows are closed at present. Although it is known that Queen I is ready to ship from the Middle East to China, it is expected to arrive in about 25-30 days, and the port inventory has been reduced for three consecutive weeks. Assuming that no sudden factors occur in the short term, China’s market will enter the stage of regional consumption. At that time, the supply of goods in Western China will be outsourced or restricted, and the price will be expected to decline. Supply in the central and eastern regions is tightening and the market is rising until arbitrage is reopened and prices stop falling and rebound.

In the main production area of Northwest China, it is reported that 600,000 tons/year MTO plant in Jiutai Inner Mongolia is scheduled to resume from the end of April to the beginning of May, and its supporting 1 million tons/year methanol plant products will stop exporting. In addition, there is also the expectation of local and surrounding sources of goods, and supply in the Northwest is tightening again. Bohai Rim Transit Zone: Dalian Hengli’s new 820,000 tons/year MTBE plant is expected to be put into operation by the end of April. Although the preliminary plan is to start half-load temporarily, it is conducive to diluting methanol supply around the Bohai Rim and even forming favorable support for Northern Jiangsu and other areas. In addition, Luxi Group plans to build 300,000 tons/year MTO plant in April-May, and its 800,000 tons/year methanol plant products will be fully self-used, benefiting Shandong, Shanxi, Hebei and Northern Jiangsu. In East China, it is reported that Nanjing Chengzhi’s new 600,000 tons/year MTO plant is scheduled to be put into operation at the end of the second quarter, which will further increase the demand for methanol at the port, stimulate the circulation of cargo sources in Guanzhong, Shaanxi Province, and thus boost the market.

If the above benefits are superimposed, it does not exclude the possibility of boosting the mindset of most businesses. Of course, there are certain risks in the market, such as the restart of repair facilities such as New Austria, the increase of import sources such as Iran, and the one-month environmental protection inspection in Shandong Province, etc. Even including macro-weak adjustment, the linkage effect of chemical products and the expected return of crude oil. Therefore, we believe that from late April to early May, China’s methanol market does not rule out the possibility of a wave of rebound, followed by a downward slide.