In 2018, the overall petroleum and chemical industry is expected to continue its positive trend, with sustained price increases. The main business revenue of the entire industry is projected to exceed 15 trillion yuan, representing a year-on-year increase of about 10%. Total profits are expected to approach 900 billion yuan, growing by approximately 5%. Import and export volume will surpass 630 billion U.S. dollars, an increase of around 10%.
This information was obtained by a reporter from China Chemical Industry News at the 2018 Petrochemical Industry Economic Operation Press Conference, held on February 6.
Feng Xiangsheng, Vice President of the China Petroleum and Chemical Industry Federation (CPCIF), analyzed that there are many positive factors supporting the continued growth of the industry in 2018.
Domestic Drivers: Strong Macroeconomic Foundation
Domestically, the Central Economic Work Conference emphasized increasing support for the real economy and accelerating the construction of a modern economic system. It is expected that China’s GDP will grow by around 6.5% this year. In addition, environmental protection policies such as the "Blue Sky Defense Campaign" and the "Battle Against Pollution" will continue to have a far-reaching impact on the future economic performance of the industry.
International Factors: Global Growth and Oil Prices
Globally, 2017 saw a high degree of synchronized economic growth across many countries. Several international institutions and major investment banks have expressed optimistic expectations for the global economy in 2018.
According to data from the International Monetary Fund (IMF), in 2018, three-quarters of the world's economies are expected to experience faster growth — marking the broadest-based economic expansion in the past decade.
Regarding international oil prices, global oil demand is expected to grow moderately in 2018, rising by about 1.5 million barrels per day compared to the previous year. As a result, international crude oil prices are likely to rise gradually amid volatility. The annual average price of Brent crude oil is projected to hover around 60 per barrel**, up from **60perbarrel∗∗,upfrom∗∗54.74 per barrel in 2017.
Market Outlook
Zhu Fang, Director of the Information and Market Department at the CPCIF, noted that based on the current favorable domestic and international macroeconomic conditions, combined with momentum transformation, deleveraging, and green development initiatives, the petroleum and chemical market is expected to maintain a positive trend in 2018, with overall prices continuing to rise — although the rate of increase may slow down.
Challenges Facing the Industry
Despite the positive outlook, Feng Xiangsheng emphasized that the industry still faces numerous challenges and constraints:
Resource Constraints Intensify: In 2017, China's dependence on imported crude oil and natural gas reached 68.4% and 38.4%, respectively — both higher than the previous year.
Structural Imbalances Persist: The trade deficit across the entire industry amounted to $197.4 billion, a year-on-year surge of 45.1%.
Declining Investment: Continued declines in investment will negatively affect long-term industry development.
Low R&D Investment
Slow Transformation of Old and New Drivers
Trade Frictions Increase
These factors pose significant challenges to the industry’s pursuit of high-quality development.
Six Key Areas for Action
To achieve the goal of stable progress and sustained growth in 2018, Feng proposed focusing on six key areas:
Eliminating outdated production capacity
Strengthening technological innovation
Promoting green development
Building industrial clusters
Deepening international cooperation
Enhancing forecasting and early warning capabilities
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