On January 18, the closing price of propylene market in the Far East remained stable. FOB Korea closed at $923-929 a ton, unchanged; CFR China closed at $957-965 a ton, unchanged.

On January 18, the closing price of propylene in Europe and the United States rose. The closing price of FD in the U.S. Gulf ranged from US$563 to 587 per ton and remained unchanged; the closing price of FD in Northwest Europe ranged from 915 to 926 euros per ton, up 11 euros per ton; and the closing price of CIF in Northwest Europe ranged from 906 to 917 euros per ton, up 2 euros per ton.

Guided by the concept of openness, cooperation and win-win cooperation in the 25 years, China Petroleum overseas oil and gas business firmly grasped the opportunity of “one belt and one road” in 2018. The output of oil and gas equities for the first time exceeded 98 million tons, and the foreign cooperative oil and gas output exceeded 10 million tons. China Petroleum’s competitiveness and influence in the international oil and gas market continued to improve.

According to the latest statistics released in Vienna on Monday (14) by Austrian Oil and Gas Group (OMV), the largest energy group in Central Europe, OMV’s oil and gas production increased by 10% annually in the fourth quarter of last year, according to the WENews website on January 14, 2019.

Statistics show that OMV’s average daily oil production increased from 460,000 barrels in the third quarter to 447,000 barrels in the fourth quarter of last year.

In addition, OMV’s retail and commercial profits also increased in the fourth quarter of last year.

On January 16, the price of acetone in Europe was stable, and the price of FD in Northwest Europe was 647.5-652.5 euros/ton.

On Jan. 16, the closing price of methanol in Asia rose, with methanol CFR concentrated in China at $279-281 per ton, up by $8 per ton, and methanol CFR concentrated in Southeast Asia at $299-301 per ton.

According to foreign news on January 14, most of the basic metals in London and Shanghai markets were flat on Monday. Investors were waiting for trade data from China, the major metal consumer, and the dollar was stable.

China will release December trade data later Monday.

Three-month copper on the London Metal Exchange (LME) rose $24 or 0.4% to $5,966 a tonne at 10:00 Beijing time.

The main contract of Shanghai Copper fell 10 yuan or 0.02% to 47,170 yuan per ton in March.

In an interview, Zhong Shan, Minister of Commerce, was quoted in a press release on the website of the Ministry of Commerce of China as saying that in 2019, the Ministry of Commerce will continue to implement the plan of action to promote foreign investment and strive to “stabilize foreign investment”. First, it will relax market access, continue to reduce the “negative list” of the national version and the FTA pilot area, and allow more areas to operate solely. We will promote comprehensive pilot projects to expand the opening up of service industries.

In other market news, Asian stock markets were close to a one-and-a-half-month high on Monday, with investors closely following China’s forthcoming trade data as more and more signs emerged that China’s slowdown was slowing down global economic growth.

Price Trend

The domestic butadiene market has increased significantly this week. Business Association monitoring showed that the price of butadiene was 10 420 yuan/ton at the beginning of the week, and 10 903 yuan/ton at the end of the week. The price of butadiene rose by 4.64% in the week and 4.19% year-on-year.

II. Analysis of Influencing Factors

Product: This week, the domestic butadiene market rose significantly. It is reported that the domestic butadiene plant operated smoothly in January. At present, the social inventory of butadiene is low. The fluctuation of market mindset and supply side has great influence on the market price. However, considering the depressed crude oil price and the drag of the downstream market trend of tyres and other terminals, the rebound of butadiene is limited and the fluctuation of the market is mainly short-fast. With the gradual stagnation of logistics transportation during the Spring Festival, some downstream synthetic rubber manufacturers will reserve raw material stocks before the festival, or will lead to a rebound in the market. In February, due to the light market turnover during the first half of the Spring Festival holiday, the inventory of butadiene manufacturer products increased during the Spring Festival period, which needs to be gradually digested after the year, coupled with the release of new plant capacity, it is expected that the market will be mainly weak consolidation, and the market will continue until the beginning of March. In March, downstream factories started to increase slightly, when the two sessions were held, the logistics transportation was restricted, or the market rebounded slightly. In the first quarter of 19 years, we need to pay attention to the operation of the plant and the change of macro-information policy.

Industry Chain: Styrene Butadiene Rubber: Although Tianguo rebounded, but the impact of supplier growth is less than expected and time is late began to reflect, and because demand has weakened, the market of Styrene Butadiene Rubber shows shocks, the actual transaction price has been loosened, trading flat. Cis-butadiene rubber: domestic cis-butadiene rubber market high shock market. Although the offer is stable, the inquiry atmosphere on the spot is cold, some of the businessmen let the profit to deliver the goods, and the bargaining price center is lowered, and the volume of delivery is scarce. SBS: Oil glue prices in domestic SBS market have been pushed up, and dry rubber road has been changed to price finishing. Oil glue: “two barrels of oil” supply price stable operation, merchants to deliver early empty orders, new single market prices increased, but limited turnover. In the aspect of dry rubber road reform, with the increase of market prices, the industry’s wait-and-see mentality, the atmosphere of winter storage weakens.

3. Future Market Forecast

On the positive side, the external price is firm; butadiene supply side is tight. In short, downstream synthetic rubber market follow-up is insufficient. Business community butadiene analysts expect that the short-term domestic butadiene market continues to be weak, focusing on market turnover.

Price Trend

According to the sample data monitored by business associations, as of January 10, the average price of domestic BDO market was 10,075 yuan/ton, which was 9.47% lower than that of the previous year.

II. Market Analysis

Products: Domestic BDO market is weak, lack of effective favorable support, empty negotiation atmosphere, poor mentality of traders, bargaining, part of the supply is lower than the mainstream of the market, downstream just need to take goods, counter-offer price is serious, it is expected that the domestic BDO market is weak.

On the market side, the BDO market in North China operates steadily and the trading atmosphere is weak. Downstream just need to buy on the side of fatigue, the market has no clear good support, the mindset of the business is on the side of fatigue. Eastern China BDO market disadvantageous reorganization. Spot supply in the market is sufficient, downstream just need to buy weak, the overall market trading atmosphere is light, suppliers are under pressure to deliver goods, and the negotiation of real orders is the main. The BDO market in South China is mainly consolidated. Downstream demand continued to slump, supplier shipment intention downward more favorable, but high-level trading pressure. Businessmen have an empty mind in the future, and the market has no good support.

Industry chain: As for raw materials, domestic calcium carbide prices have been moving smoothly. At present, the market supply is still sufficient. Sales in East China and North China are still under pressure. Although the Northwest has eased, the speed of cargo transportation has not been significantly accelerated. Calcium carbide prices are expected to stabilize in the near future.

3. Future Market Forecast

Just need to deal with the main; downstream inadequate start-up, low production and marketing. Business agency BDO analysts predict that short-term BDO market is mainly weak.

OPEC officials say Saudi Arabia plans to cut its crude oil exports to about 7.1 million barrels a day by the end of January, hoping to raise oil prices to more than $80 a barrel.

The new strategy comes as Saudi Arabia seeks to cover a substantial increase in government spending. Last month, the company said it planned to increase spending by 7% in 2019, equivalent to $20 billion, as the country was trying to fund its ambitious plan to diversify its economy beyond oil products.

Mohammed bin Salman, Saudi real ruler and Crown Prince, has been facing a sharp drop in oil prices since October last year because of oversupply. Last October, journalist Jamal Khashoggi was brutally murdered by Saudi agents, which also prevented foreign companies from working in Saudi Arabia and investing in the country’s economic development plan.

According to an official from the Organization of the Petroleum Exporting Countries, Saudi Arabia’s new budget calls for oil prices to rise to $95 a barrel. But according to people familiar with the situation, Saudi Arabia will be satisfied with the oil price of $80 to $85 a barrel, which will limit the demand for Saudi Arabia to use its financial reserves.

To compensate for the proposed expenditure, the Saudi government will cut crude oil exports from November levels to up to 800,000 barrels a day.

Saudi Arabia exported about 7.3 million barrels of crude oil a day last month. That figure has fallen from about 7.9 million barrels a day in November and 7.7 million barrels a day in October.

An official from the Organization of Petroleum Exporting Countries (OPEC) said the U.S. market would see the biggest drop in Saudi oil exports. Overall, export cuts will exceed the six-month commitment made to OPEC in early December.

At last month’s OPEC meeting, Saudi Arabia agreed to cut oil production by 2.5% from October levels starting in January. Subsequently, it raised its target to 3%. But shipping is the most important component of its supply because of its impact on the global oil market.

Oil prices fell below $80 a barrel in October 2018 as Saudi Arabia put pressure on the United States to replace sanctioned Iranian oil and boost oil supply. This growth outcomes exceed market needs.

OPEC officials said the new measures were unlikely to raise oil prices to the level required by Saudi Arabia in the short term. But they say that when analysts expect oil demand to rise, oil prices of $80 a barrel may become possible in the second half of this year.

Brentcrude, the global benchmark, rose 1.2% to just under $59 a barrel on Monday, while West Texas Intermediate Oil (WTI) rose 3.5% to just under $50 a barrel, after the Wall Street Journal reported that Saudi Arabia planned to cut exports further.
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