China's petroleum and chemical industry development status and development prospects forecast

Development status of China's petroleum and chemical industry

China Petroleum and Chemical Industry Federation released the "2019 China Petroleum and Chemical Industry Economic Operation Report" shows that as of the end of December 2019, there were 26,271 enterprises above designated size in the petroleum and chemical industry. In 2019, the operating income of the petroleum and chemical industry was 12.27 trillion yuan, an increase of 1.3%. The total profit was 668.37 billion yuan, down 14.9 percent year-on-year, accounting for 11.6 percent and 10.8 percent of the operating income of large-scale industries in the country respectively. In 2019, the total import and export volume of the petroleum and chemical industry was 722.21 billion US dollars, down 2.8% year-on-year. Assets totaled 13.40 trillion yuan, up 7.7% year on year; Asset-liability ratio 55.92%, up 1.16 percentage points year-on-year; The loss of loss-making enterprises reached 132.08 billion yuan, an increase of 9.7% year on year; The industry lost 17.6%. In 2019, the industry-wide operating income profit margin was 5.45%, down 1.04 percentage points year-on-year; The cost per 100 yuan of operating revenue was 82.67 yuan, up 1.39 yuan year-on-year.

Li Shousheng, president of China Petroleum and Chemical Industry Federation, said, "From the perspective of the development of the petrochemical industry, China has become a major oil and chemical country in the world, accounting for 40% of the global market share." According to the statistical analysis of the "2020 Energy and Chemical Confidence Index Report", compared with the first half of 2020, the demand for China's energy and chemical products will increase in the second half of 2020. Thanks to the successful control of the epidemic in China and the rapid economic recovery, more than 70% (71.43%) of the respondents believe that China's demand will increase in 2020.

With the increasing downward pressure on China's macro economy, the operating income growth of enterprises above designated size in China's petroleum and chemical industries has slowed down. In 2019, the operating income of enterprises above designated size in China's petroleum and chemical industries was 12.27 trillion yuan, up by 1.3%; Affected by the epidemic, in the first half of 2020, the operating income of China's petroleum and chemical industry was 5.07 trillion yuan, down 11.9%.

From 2015 to the first half of 2020, the total profits of China's petroleum and chemical enterprises above designated size showed a year-on-year decline trend. According to the National Bureau of Statistics, in 2019, the total profits of enterprises above designated size in China's petroleum and chemical industries fell significantly, to 668.37 billion yuan, down 14.9%; In the first half of 2020, the total profit was 141.61 billion yuan, down 58.8%.

From 2015 to the first half of 2020, the number of enterprises above designated size in China's petroleum and chemical industry showed a year-on-year decline. According to the National Bureau of Statistics, by the end of 2019, there were 26,271 enterprises above designated size in the petroleum and chemical industry, a decrease of 5.54% year-on-year. By the end of June 2020, there were 25,787 enterprises above designated size in the petroleum and chemical industries.

The petroleum and petrochemical industry can be divided into three major sectors: oil and gas exploration and development production, petroleum refining and oil product sales, and petrochemical product production and sales. In October 2020, the press conference of China's Top 500 Petroleum and Chemical Enterprises in 2020 and the Development Summit Forum of large chemical Enterprises in the post-epidemic Era were held online. At the meeting, the Top 500 petroleum and chemical enterprises in China in 2020, the Top 100 enterprises in different industries and the Development index of China's petroleum and chemical industry in 2020 were released. China Petroleum and Chemical Corporation Limited, China National Petroleum Corporation Limited and China National Offshore Oil Corporation Limited ranked the top three with main business income of 2.95 trillion yuan, 2.65 trillion yuan and 750.8 billion yuan respectively. In addition, the main business income of the 500 comprehensive enterprise groups on the annual list reached a record 13.5 trillion yuan, an increase of 400 billion yuan, an increase of 3%, higher than the economic growth rate of the industry.

According to the data of enterprise check Cat, the existing and operating enterprises in China's petrochemical industry are mainly concentrated in the first echelon of Shandong (286,800) and Jiangsu (250,000), accounting for 6.45% of the 31 provinces and municipalities in the country; The second echelon, with more than 100,000 enterprises but less than 200,000, is represented by 7 provinces and municipalities, including Guangdong, Shaanxi, Anhui and Hubei, accounting for 22.58%. Last is the third echelon, the number of enterprises under 100,000 to Shanghai, Zhejiang, Jiangxi, Fujian and other 22 provinces, regions and municipalities, accounting for 70.97%.

From the perspective of industrial income structure, the petroleum and chemical industry can be divided into chemical industry, refining industry and oil and gas extraction industry. In 2019, the operating income of China's petroleum and chemical industry was 12.27 trillion yuan, an increase of 1.3% year-on-year, among which, the operating income of the chemical industry was 6.89 trillion yuan, a decrease of 0.9% year-on-year, and the operating income of the refining industry was 4.02 trillion yuan, an increase of 4.6%, a growth rate of 1.6 percentage points; The operating income of the oil and natural gas extraction industry was 1.10 trillion yuan, up by 2.4 percent or 0.6 percentage points.

In the first half of 2020, the operating income of the petroleum and chemical industry was 5.07 trillion yuan, down 11.9% year-on-year and 1.6 percentage points narrower than that of the first quarter, accounting for 11.0% of the operating income of large-scale industries in the country. Among them, the operating income of the chemical industry was 2.93 trillion yuan, down 10.5% year-on-year, which was 8.1 percentage points narrower than that in the first quarter; The operating income of the refining industry was 1.61 trillion yuan, down 13.1% or an increase of 5.7 percentage points; The operating income of the petroleum and natural gas extraction industry was 418.69 billion yuan, down 17.8% or 16.9 percentage points.

Overall, China's petroleum and chemical industry is still dominated by the chemical industry and refining industry, with the proportion of both reaching 89.55% in the first half of 2020.

In terms of the production and sales of petrochemical products, the current domestic petrochemical products are in short supply. Due to the special advantages of the petrochemical industry in the industrial chain and its market supply and demand situation, the industry has a strong bargaining power, and the price growth rate of petrochemical products and its processed products is higher than the growth rate of crude oil prices. Petrochemical products mainly include ethylene and other derivative products, synthetic resins, synthetic fibers, synthetic rubber, urea and other categories.

China's oil refining industry is mainly developed by relying on its own technology, which can basically meet the needs of national economic and social development for petroleum products, and some products are exported. China's petrochemical industry on the basis of the introduction of technology and equipment, through digestion and absorption, in recent years, it has also developed some process technologies and been promoted and applied in the industry, which can produce petrochemical products required by the domestic market. In the field of petrochemicals, a number of new technologies have also been developed.

China's petroleum and chemical industry outlook trends

At present, China's petroleum and chemical industry is at the historical intersection of industrial reform, facing the challenges of increasing resource and environmental constraints, rising factor costs, and increasingly prominent structural contradictions. China's petroleum and chemical industry should take the entrepreneurial confidence chess, form the determination of hard work and upward, and determine their own business positioning and future market development potential; We should play the strategic management game well, improve the ability of strategic control, and strive to improve the level of strategic management of enterprises.

It is necessary to pursue transformation and development, stimulate internal impetus, accelerate the pace of industrial upgrading, transformation and product innovation, and promote the development of industrial distribution to the high-end of the industrial chain and strategic emerging industries.

We need to develop through innovation and enhance our ability to drive innovation. Make good progress in internationalization and enhance international competitiveness. After analyzing China's economic operation, industrial production, price trend and structural adjustment and other comprehensive factors, the judgment is made; Using linear regression method, it is estimated that the sales revenue of China's petrochemical market will reach about 12 trillion yuan in 2026.