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The Impact Of Falling Oil Prices On The Chemical Industry

The speed and difficulty of the price transmission of raw materials vary with the industrial chain status of many chemical sub-industries.Generally, the chemical products close to the resource end have faster cost transmission and more frequent price changes, while the chemical products close to the consumer end have a long industrial chain, and the product price is inert, lags behind and has a small range.

Recently, influenced by many factors, oil prices, mid may will be in the middle and lower position, equivalent to the cost side down, more conducive to partial consumption on chemicals, such as synthetic leather, modified plastics, adhesives, paint ink, electronic chemicals, pesticide preparation and other industries, but unfavorable to replace industry of coal chemical industry, such as PVC, methanol, carbon black, also does not favor the polyester filament industry chain.

1. Synthetic leather: cost reduction.Synthetic leather downstream mainly for shoes, clothing, sofas, cars and other fields.In the past two years, the price of raw materials as a whole went up, such as pure MDI, PTMEG, solvent, etc., the gross margin of products continued to decline, and the profits of the industry fell sharply.The price of oil falls, the supply and demand of industries such as superposition pure MDI are out of balance, the price of raw materials falls, while the synthetic leather has the consumption property, the price of products changes little, and the profitability is expected to rise.

2. Modified plastics: the price of polymer drops.Modified plastics are mainly used in automobile, home appliance and other industries.With the decline of oil price, the price of downstream polyolefin, PVC and other chemical products has dropped, and the price of modified plastic raw materials has declined, it will be conducive to improving the gross profit rate of modified plastics in a certain period of time.Relevant listed companies benefit.

3. Adhesives, coatings and inks, electronic chemicals: downstream involves many industries of national economy.Adhesives, coatings used in automobiles, real estate, home appliances and so on;Electronic chemicals are mainly used in the electronic field.When oil prices fall, the prices of solvents or basic chemicals used in these industries will follow suit, and the profitability of these products will increase accordingly.

4. Pesticide preparation: mainly used in agriculture, gardens and other fields.With the oil price low, the prices of pesticide intermediates, raw drugs and solvents may fall, pesticide preparation prices may fall steadily or slightly, and the gross profit rate is expected to rise.

Falling oil prices are bad for the coal chemical industry.Mainly because of the decline in the price of petrochemical products, and alternative technology of coal chemical industry profits will narrow.The decline in oil price is not conducive to the polyester filament industry chain in the short term, mainly due to the loss of raw material inventory, but in the medium and long term, the industry is still mainly concerned about the supply and demand relationship.


ZHEJIANGJIAAO ENPROTECH STOCK CO.,LTD

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ADD: No.1 Economic & Development Zone, Tongxiang, Zhejiang, China

Contact: Gray Li

TEL: 86-573-88623097

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E-mail: inquiry@jiaaohuanbao.com

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