Crude oil is fire and refined oil is ice. In 2005, the refining businesses of Sinopec, Shanghai Petrochemical, and Yangzi Petrochemical suffered substantial losses. The profits of China Petroleum, Liaohe Oilfield, and Petroleum Daming, which are dominated by crude oil extraction, grew rapidly, and the gross profit margin was also high. Create a new high.
We have analyzed the crude oil exploration and mining business of Sinopec, Daming and Liaohe oilfields in the published annual reports or the three quarterly reports, showing that the revenues from the crude oil extraction business of Sinopec and the oil company Daming have increased by 30%. The three companies’ The gross profit margins were as high as 57.28%, 68.64% and 69.06% respectively.
The correlation between the gross profit rate of crude oil and natural gas exploration in the upper reaches and the international oil price is relatively high. At the same time, under the background of rising international crude oil prices, the gross profit of the upstream business of oil and gas exploration and exploitation has also increased. The upstream crude oil and natural gas Mining profits continue to hit a new high.
In contrast, the gross profit margins of the refining operations of Sinopec, Shanghai Petrochemical, and Yangzi Petrochemical last year were -1.67%, -1.82%, and -9.56%.
The reason for the decline in the gross profit margin of Shanghai Petrochemical and Yangzi Petrochemical's refining business is greater than that of Sinopec is that most of its raw material crude oil imports depend on imports, while a significant portion of Sinopec's crude oil comes from self-produced and outsourced CNOOC crude oil, in other words, China Due to its relatively complete industrial chain, petrochemicals can absorb some of the adverse effects caused by rising raw material prices.
Naphtha: troubles of middlemen <br> Since 2003, petrochemical products have entered a period of gold development, with prices increasing more than the rise of important raw materials naphtha. The peak of this petrochemical cycle was formed in October 2004, 2005. The spread of petrochemical products gradually declined, and the gross profit of most products had returned to the historical average in the fourth quarter of last year. Although the decline was not significant, the naphtha price as an important raw material gradually increased during the same period, which further reduced the profitability of related companies. .
From the changes in main business income and main business cost of Sinopec, Shanghai Petrochemical, and Yangzi Petrochemical from 2004 to 2005, especially the change in gross profit margin, we can see that compared with 2004, main business revenues are all different from 2004 levels. The increase, but because the increase in costs far exceeds the rate of increase in revenue, leading to a significant decline in gross margin.
The price transmission in the downstream petrochemical industrial chain is mainly market adjustment. The rise in prices of crude oil and naphtha and other upstream and downstream products is inevitably transmitted to the downstream industries such as ethylene, PVC, HDPE, LDPE, and PP. Due to fierce competition in the middle and lower reaches of the industry, product prices are difficult to adjust quickly with the rise of upstream raw materials, product supply flexibility, price transmission mechanism has obviously blocked. The sharp rise in upstream materials, most of the cost of price increase is borne by the downstream.
Among these, although the gross profit margin of petrochemical basic chemical raw materials (intermediate petrochemical products) has declined, it can still maintain a high level of more than 20%, which is directly related to the relatively strong demand in the downstream. In 2004-2005, the gross profit margin of intermediate petrochemical products declined more than that of downstream petrochemical products. The main reason was that the gross profit level of most petrochemical products soared by about 60% in the first three quarters of 2004, exceeding the increase in crude oil prices. The increase in new production capacity has intensified the competition, resulting in a faster decline in gross profit.
Petrochemical industry chain left and right faces
In the petrochemical industry chain, crude oil and natural gas production are the source. Refined oil processing, intermediate petrochemical products are in the middle, and chemical fiber, rubber, and plastic products are in the downstream. This article only analyzes the upstream and middle reaches of the petrochemical industry chain, and specifically analyzes the two major chains of crude oil—product oil, naphtha, naphtha—main intermediate products such as ethylene, PVC, HDPE, LDPE, and PP.