Summary of views
- From May 29 to June 2, a total of three refiners and three traders were visited in Dongying, Binzhou and Zibo, Shandong, and the views in this report are only partially representative due to the limitation of sample size.
- The main purpose of this survey is to understand what the current market is focusing on and the mentality of participants from the perspective of industrial terminals. Overall, we find that a reduction in expectations of recovery and a rising uncertainty at the policy level are gradually forming a consensus in the industry.
- From the perspective of the long-term industrial structure, the industry itself is actually aware of the necessity of long-term transformation earlier and deeper: the replacement of new energy may be more than the market expects; The tightening of policies also means that the path of capacity clearance at the national level has not changed, and the survival space of non-standard enterprises may be further squeezed.
Lower expectations and accept a weak recovery
From the perspective of the industry, the domestic recovery forecast is constantly being revised downward. In the first quarter, we maintained an optimistic attitude towards the recovery of demand after liberalization, but by the second quarter, we will find that the start of construction has been maintained after the month-on-month decline, and there is no drive for continued recovery.
On the one hand, georefinery is affected by the problem of customs clearance of diluted asphalt raw materials, the supply of raw materials is tight, many refineries are forced to stop or switch production, and other refineries are close to full operation driven by reasonable profits, so the main constraint of subsequent starts is still the problem of raw materials; On the other hand, from the perspective of actual demand, the recovery of domestic demand is lower than expected, whether it is the manufacturing PMI falling below the boom and bust line, or the weakening of exports, which is reinforcing the fact of weak recovery. Transmitted to the upstream, weak demand is difficult to support the start of crude oil.
As a result, the mentality of the industry has undergone a major change, lowering expectations, accepting a weak recovery, and has gradually formed a consensus at the terminal. Subsequently, for crude oil, the main downward logic of the industry's attention is pessimism about recession expectations under a weak macro and doubts about the execution of OPEC's production cuts; The upward drive is to focus on whether domestic policies will have a greater degree of support to stimulate consumption.
Steam is strong and diesel is weak, waiting for opportunities
From the perspective of downstream products, the current peak season of gasoline, the off-season of diesel, and the pattern of strong gasoline and weak diesel have seasonal characteristics. But there are still marginal factors.
1. A large part of the strength of short-term gasoline comes from cost support.
From the perspective of production and sales ratio, gasoline's situation this year is close to the average, production and sales are relatively balanced, and the overall performance is relatively tepid. The high gasoline price and the simultaneous strength of cracking mainly come from two aspects.
First, the cost of tax stamps has risen. With the advancement of Golden Tax 4, the tightening of tax stamps at the regulatory level is squeezing the survival space of small oil blenders. Since the beginning of this year, the cost of tax stamps has risen by 40-50%, supporting gasoline from the cost side.
The second is the price advantage of raw materials. The discount of non-standard oil gives a better economy.
2. Diesel off-season, seasonal peak season expectations are still divergent.
At present, diesel is weak, and the attitude of the industry is still looking forward to the peak season, and more attention is paid to the extent of seasonal demand recovery in August/September. On the whole, the differences in terminals are large. Some people think that whether the peak season can come out depends on the support of policies; The other part is still waiting for the opportunity of phased multi-cracking, but the height of cracking rebound is also considered to be relatively limited.
From a strategic point of view, compared with before, traders are willing to pay a certain amount of holding costs to lay out in advance in the absence of strong support from current demand and greater uncertainty in policies, that is, by selling far months to lock profits, the holding period is slightly longer (30-45 days), and light positions to grasp the rebound opportunity of seasonal demand.
Changes in the industrial structure from the perspective of long-term cycle
1. The replacement of new energy is faster than expected, and gasoline is the best time
From the perspective of the industry, gasoline is bearish in the long run. The main logic is that the degree of replacement of trams may be faster and greater than the market expects.
In the past two years, the penetration rate of new energy vehicles has grown rapidly, and in May this year, the retail sales of new energy passenger vehicles were 580,000 units, with a penetration rate of more than 30%. With the support of policies such as sending new energy vehicles to the countryside, sending licenses, and encouraging overseas expansion, the trend of replacing oil vehicles with new energy vehicles will continue, and the penetration rate of new energy vehicles is expected to further increase in the future.
At the same time, from the perspective of subdivided industries, new energy vehicles account for a relatively large proportion of online car-hailing, and online ride-hailing is a type with an average daily mileage higher than average, from this point of view, the replacement of gasoline by new energy vehicles may be higher than expected.
2. The raw material problem and policy trend are actually all back to the path of de-capacity
The biggest feeling of this survey is that the industry believes that "uncertainty" is rising, mainly focusing on tax policies and raw material issues.
(1) Tax audits are becoming stricter.
As mentioned earlier, the promotion of Golden Tax 4 has further improved the habit of bringing tickets when supplying enterprises, while squeezing the irregular behavior of small oil blenders. Interests, main or large-scale wholesalers and traders believe that profits will increase, while the living space of small oil blenders or gas stations is relatively compressed. If the follow-up policy continues, more non-standard enterprises may face transformation.
(2) The quota is tightened, and the raw materials are contradictory fermentation.
The recent issue of customs clearance of diluted bitumen raw materials is one of the focuses of market attention, and the specific situation will have to wait for a formal notice from the customs. However, from the perspective of customs tightening the release of raw materials, the policy level is further strengthening supervision of the lack of quotas but the import of non-standard oil in the name of diluted bitumen.
It can be seen from the issuance of local refining quotas by the state in recent years, first of all, the overall quota amount has basically not filled the total allowable amount, and the trend of continuous growth has also been suspended; Secondly, looking at the breakdown of allocation, some small refineries with backward capacity have no longer issued quotas, but are supplemented by large-scale integrated units. This actually shows that the country's thinking on clearing backward production capacity and efficiency transformation has not changed.
Therefore, the raw material problem may not only be a precise certification standard for diluting the physical properties of bitumen, but more a trade-off between the path of capacity clearance and the living space of enterprises at the policy level.
In summary, this survey mainly conducted in-depth exchanges with three local refiners and three traders, and understood what the current market is paying attention to and the mentality of participants from the perspective of industrial terminals. In response to the short-term market, the industry's expectations are decreasing with the performance of actual demand, accepting a weak recovery, waiting for the opportunity to enter the market may slowly form a consensus; In addition to seasonal factors, there are also marginal factors such as cost support. From the perspective of the long-term industrial structure, the industry itself is actually aware of the necessity of long-term transformation earlier and deeper: the replacement of new energy may be more than the market expects; The tightening of policies also means that the path of capacity clearance at the national level has not changed, and the survival space of non-standard enterprises may be further squeezed.
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