The mechanism of the impact of rising oil prices on rubber and plastics is relatively simple, mainly due to rising costs; For the chemical fertilizer and soda ash industries, the overall impact of oil price changes is not significant.
The continuous rise in oil prices has attracted investors' attention. The rise and fall of crude oil prices will have an impact on the credit fundamentals of many sub-industries, and then affect the subsequent performance of related credit bonds, among which the chemical industry has the greatest impact. This paper attempts to explore the influence of oil price changes on the profitability of different chemical industries.
What is the impact of rising oil prices on the chemical industry?
For other chemical industries, coal chemical business mostly extends the industrial chain from coal enterprises to the downstream, and there are not many enterprises doing coal chemical business alone; The mechanism of the impact of rising oil prices on rubber and plastics is relatively simple, mainly due to rising costs; For the chemical fertilizer and soda ash industries, the overall impact of oil price changes is not significant.
1. coal chemical industry: the rise in oil prices is good for new coal chemical industry. Coal chemical industry mainly includes traditional coal chemical industry and new coal chemical industry. Traditional coal chemical industry mainly includes coal coking, coal-based calcium carbide production and coal-based synthetic ammonia, while new coal chemical industry mainly includes coal-based methanol, coal-based olefin production, coal-based natural gas production, coal-based ethylene glycol production and coal-based petroleum production. Therefore, the rise of oil price has little effect on traditional coal chemical industry, but it is beneficial to new coal chemical industry.
2. Plastics: The profit margin of resin and plastic processing is squeezed, and the downstream processing is more damaged. The downstream of the plastic industry is mainly light industry with plastic products as its main business. On the one hand, the demand side of the downstream plastic processing industry is mostly strong consumer groups such as real estate and automobiles, and the rising cost of synthetic resin caused by rising oil prices is difficult to pass on to the demand side; On the other hand, most industries are small and medium-sized enterprises, with huge overall volume, low entry threshold and strong substitutability. The homogenization competition of low-end plastics is fierce, and the increase in cost will further reduce the profit margin of the industry. For resin, the rise of oil price is also a negative impact, but the bargaining power is relatively better than that of downstream processing enterprises, and the negative impact is small.
3. Fertilizer: indirectly stimulates demand, but the cost will also be under pressure, and the overall impact is not great. A sharp rise in oil prices may increase the demand for biomass energy, thus pushing the demand for pesticides and fertilizers to rebound, but this process is relatively long, and the possible impact is relatively limited when oil prices rise slightly; On the other hand, due to the substitution relationship between oil price and natural gas, the recovery of oil price will also lead to the recovery of natural gas price, which may bring pressure on gas fertilizer production enterprises to increase costs. Overall, the rise in oil prices has little impact on the fertilizer industry.
4. Rubber: The cost of synthetic rubber has risen, and the demand for natural rubber has rebounded. The main raw materials of synthetic rubber come from naphtha cracking or cracking products, such as butadiene, acrylonitrile and styrene. Therefore, as the oil price rises, the cost end of synthetic rubber will naturally face upward pressure. At this time, for natural rubber whose raw materials mainly come from rubber trees, the cost end has not been affected. As a substitute, natural rubber benefits from the rise in oil prices.
5. Soda Soda: Demand and cost have little to do with crude oil and are hardly affected by oil prices. Raw materials for manufacturing soda ash mainly include raw salt, synthetic ammonia and limestone, which are not directly related to oil price, while the downstream demand of soda ash mainly includes glass, washing, printing and dyeing, alumina and other industries, and the demand is basically unaffected by oil price. Overall, the rise in oil prices will not have a significant impact on the soda industry.
6. Chlor-alkali industry: the ethylene process is damaged and the calcium carbide process benefits. The important raw material of vinyl PVC is naphtha cracking product, so the price of PVC has a certain positive correlation with the price of crude oil. However, due to the long distance of industrial chain, the price change of PVC often lags behind that of crude oil. For example, the price of crude oil fell sharply in June 20 14, but the price of PVC fell sharply until February 14. Although, in mechanism, the increase of crude oil price will stimulate the increase of PVC price by ethylene method, because most of the production capacity of PVC in China is produced by calcium carbide method, the overall cost will not increase obviously with the increase of crude oil price, resulting in the lack of price elasticity of PVC relative to crude oil, which in turn leads to the deterioration of PVC profit by ethylene method.