European debt "cold stream" approach chemicals how to "turn crisis into opportunity"?

The 8th edition of February 13th made specific analysis and situation judgment on the impact of the European debt crisis on the fine chemical industry, and the problems faced by China's fine chemicals in the European debt crisis and future development, and the development of the industry through the voice of industry experts. Put forward sound opinions. This issue will turn its attention to another area of ​​chemical products - bulk chemicals and basic chemicals. In the bottom-up European debt "cold stream" influence behind, China's bulk chemicals and basic chemicals development how to achieve rapid development? Faced with crisis challenges, how should we face the general trend of international economic integration? Please see -

- On January 16, 2012, Standard & Poor's Ratings announced that it will downgrade the EFSF rating from AAA to AA+. The status is undetermined.

- On January 31, 2012, at the EU leaders’ informal meeting, the 27 countries unanimously adopted the “European Financial Stability Mechanism (ESM)”.

- On February 13, 2012, the European Union was once again “headed”. Moody's downgraded the credit ratings of six countries in the euro area and changed the status of AAA ratings in Austria, France and the United Kingdom to “negative”.

- On February 29th, 2012, the European Central Bank launched the second round of re-operations, and issued 529.53 billion euros of funds to the banking industry through a three-year long-term re-operation.

- On March 2, 2012, Moody's Investor Company downgraded Greece's sovereign debt rating to the lowest rating in the absence of a default—C. Due to the possibility of default by the Greek government, Moody's will not give ratings.

In winter, everyone loves to connect one sleigh to a "long dragon" and slide on the ice. The person sitting on the end sledge feels like this: When the leading sledge is just turning, there is no movement behind it, but this change is transmitted through the middle of a sled, and the end sledge is often a large "flicker."

At present, the ongoing European debt crisis is blowing into China. Even seemingly well-established basic chemicals and bulk chemicals manufacturers may experience similar conductive effects.

Li Zhenyu, director of the Institute of Strategic and Information Studies at the China Petroleum Institute of Petroleum and Chemical Industry, pointed out that the impact of the European debt crisis on basic chemicals and commodities is a process that is gradually advancing from downstream to upstream. The debt crisis in Europe has led to a reduction in the volume of commodities exported by daily necessities such as machinery and electronics, textiles and toys. Demand for such commodities will eventually be transmitted to the upstream raw materials industry, where there will be a decrease in demand for bulk chemicals, difficulty in boosting prices, and a downturn in the market.

As an upstream product in the product processing chain, basic chemicals and bulk commodities such as polyethylene, polypropylene, and synthetic rubber are “hidden” in the various components of mechanical and electrical products, textile and clothing, toys, and plastic products.

Only from the consumption point of view, home appliances and other products in the field of electromechanics is the third largest application area for plastics. Encapsulant resins, magnetic media substrates, various cables, home appliances shells, various electrical parts and daily necessities are everywhere. Open synthetic resin, synthetic rubber. The main components of textile clothing are synthetic fibers such as polyester, nylon, acrylic, vinylon and others. Further back, the raw materials of these products are polyester (PET, PBT), polyethylene (PE), polypropylene (PP), polyacrylonitrile (PAN), ethylene glycol (EG), acrylonitrile, styrene, Butadiene and so on.

Mechanical and electrical products and textile clothing are the main commodities exported by China to the European Union. According to statistics, during the first five months of 2011, China’s mechanical and electrical products accounted for 22.2% and 18.9% of the major European and North American export markets, respectively, accounting for 41.1% of total exports. Among them, Europe is China's largest export market for electromechanical products with an export volume of 80.65 billion U.S. dollars. In the ranking of major countries or regions for the export of textiles and clothing in China, the EU is also ranked in the top three.

At present, in response to the European debt crisis, EU countries have seen frequent austerity measures, and European overall consumer demand has shown a weak trend. Among them, electromechanical, textile and other irreplaceable consumer products bear the brunt. The European Chemical Industry Council has reduced the growth rate of EU chemical production in 2012 from 2.5% to 1.5%.

Although it is difficult to find basic chemical products and bulk chemicals in China's major export commodities to the EU, they will indirectly experience the “cold stream”.

“The impact of the European debt crisis from the downstream consumer sector to the basic chemicals sector may take from one quarter to two quarters.” Li Zhenyu believes that in the first quarter of this year, basic raw materials and bulk products are related. Economic data will reflect the impact of the European debt crisis. The economic situation in Europe this year is generally weak, and the impact of the European debt crisis will be clearly reflected in the second and third quarters. In addition to the downstream conduction effect of downstream consumption, under the background of global economic integration, the impact of the drop in the price of imported chemical raw materials in China on domestic related enterprises is equally important.

As a "world processing factory," China is the world's major consumer market for chemical raw materials. It is both a major producer of basic chemicals and a major importer of bulk chemicals. Li Zhenyu pointed out that when the market is sluggish, prices are often determined by the lowest production cost among producers. For the development of domestic petrochemical companies, the relatively cheap bulk chemicals exports in the Middle East have brought even greater impact in the downturn of the market, leading to some large-scale domestic chemicals even without marginal profit, and the damage surface has been further expanded.

Pang Guanglian, director of the International Cooperation Department of the China Petroleum and Chemical Industry Federation, said that various factors have caused Chinese petrochemical companies to gradually lose the advantage of basic chemicals. The competitive advantage of producing urea in the Middle East and some CIS countries has been greater than in China. The phosphate resources in countries such as Morocco and Mexico are abundant, and the advantages of producing phosphate fertilizers are gradually emerging.

Of course, no company is willing to passively wait for the transmission effect of European debt. Under the background of the prominent problems of China's basic chemical products and bulk chemical products, structural oversufficiency, lack of scientific and technological innovation, and low concentration, the solution to the crisis still needs to start from these aspects. Li Zhenyu said that on the one hand, it is necessary to further optimize the concentration of China's refining and chemical industries through the layout of large-scale refining and chemical bases, form a cluster of coastal refining and chemical industries, optimize the allocation of resources, and enhance the overall competitiveness of the petrochemical industry; on the other hand, it is necessary for companies to further Strengthen meticulous management, use advanced and applicable technologies to save energy and reduce consumption, further increase new product development, promote product structure adjustment, produce more special materials with high added value, reduce the proportion of “road cargoes”, increase product profit margins and market risk resistance. .

“Reducing the energy consumption of chemical products and strengthening the “green R&D” of products in order to better cope with the various non-tariff trade barriers that the EU has constantly raised is a major task facing companies.” Pang Guanglian pointed out.

For the domestic petrochemical industry filled with concerns, Li Zhenyu stressed that the debt crisis in Europe will inevitably have a certain impact on China's petrochemical enterprises, but in the short term can not be ignored. However, the sustained and steady growth of the Chinese economy has resulted in a stable, long-term, positive market for the bulk chemicals market. Weak external demand will be absorbed by internal demand.

All companies should seize the opportunity and “turn crisis into opportunity”. Companies that adjust quickly in this process tend to be more competitive after the crisis.