2019 Report on the Economic Performance of China’s Petroleum and Chemical Industry

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2019 China Petroleum and Chemical Industry Economic Operation Report Author/Source: Sinochem New Network Date: 2020-03-12 Clicks: 16 I. Performance of Key Economic Indicators According to statistics, in 2019, the added value of the petroleum and chemical industry increased by 4.8% on a year-on-year basis; its operating revenue amounted to 12.27 trillion yuan, representing a 1.3% increase, while the total profit was 668.37 billion yuan, showing a decline of 14.9%. The total value of imports and exports was 722.21 billion US dollars, with a 2.8% decrease. The total domestic production of crude oil and natural gas was 347 million tons (in oil equivalent terms), an increase of 4.7%; the total production of major chemicals increased by approximately 4.6%. 　　(1) Growth rate of added value rebounds, while operating revenue remains stable. According to data from the **Statistics Bureau, as of the end of December, there were 26,271 enterprises in the petroleum and chemical industry that met the specified size criteria, 68 more than at the end of the previous month. The added value of these enterprises increased by 4.8% for the whole year, with the growth rate rising by 0.2 percentage points compared to the previous year; however, this figure was still 0.9 percentage points lower than the growth rate of added value in China’s industrial sector during the same period. Among them, the added value of the chemical industry increased by 4.8%, an increase of 1.2 percentage points compared with the previous year; the oil and gas extraction industry saw a growth of 6.0%, an increase of 1.0 percentage points; the refining industry’s growth rate was 4.3%, a decrease of 2.1 percentage points. 　　From January to December, the oil and chemical industry generated revenue of 12.27 trillion yuan, a year-on-year increase of 1.3%; this growth rate was 0.2 percentage points higher than that from January to November, accounting for 11.6% of the total revenue generated by industrial enterprises across the country. 　　Among them, the operating revenue of the chemical industry was 6.89 trillion yuan, a decrease of 0.9% on a year-on-year basis, with the decline rate increasing by 0.4 percentage points compared to the previous 11 months; the operating revenue of the refining industry was 4.02 trillion yuan, up 4.6%, with the growth rate accelerating by 1.6 percentage points; the operating revenue of the oil and gas extraction industry was 1.10 trillion yuan, up 2.4%, but at a slower pace, with the growth rate decreasing by 0.6 percentage points. 　　In the chemical industry, revenue from specialized chemicals, coatings (pigments), pesticide manufacturing, and chemical mining and processing continued to grow, at rates of 2.8%, 1.4%, 4.8%, and 0.1% respectively. The production of basic chemical raw materials and synthetic materials declined by 2.6% and 0.5% respectively, while the production of fertilizers and coal chemical products dropped by 7.5% and 1.4% respectively; rubber products saw a 0.2% decline. (II) Steady and rapid growth in energy and major chemical production According to statistics, from January to December, the total national production of crude oil and natural gas amounted to 347 million tons (in oil equivalent), representing a year-on-year increase of 4.7%, which was 0.2 percentage points faster than the figure for January to November; the total production of major chemicals increased by about 4.6%, an increase of 0.6 percentage points. Crude oil production remains stable, while natural gas continues to grow at a rapid pace. From January to December, the country’s crude oil production amounted to 191 million tons, representing a 0.8% increase on a year-on-year basis, with the growth rate declining by 0.2 percentage points compared to the previous 11 months. Natural gas production reached 173.62 billion cubic meters, with an increase of 9.8%, or 0.6 percentage points faster than before. Liquefied natural gas production was 11.65 million tons, showing a growth rate of 15.6%. The national crude oil processing volume for the whole year was 652 million tons, an increase of 7.6% on a year-on-year basis; the output of refined oil products (including gasoline, coal oil, and diesel, the same below) was 360 million tons, with a growth rate of 0.2%. Among them, diesel production amounted to 166 million tons, a decrease of 4.0%; gasoline production reached 141 million tons, up 1.9%; kerosene production stood at 52.726 million tons, an increase of 10.6%. 　　The growth of key chemicals remained generally stable. In 2019, the country produced 20.523 million tons of ethylene, a 9.4% increase on a year-on-year basis; 8.618 million tons of pure benzene, a 2.1% decrease; 49.363 million tons of methanol, a 0.4% increase; 24.388 million tons of coatings, a 2.6% increase; 23.607 million tons of chemical reagents, a 12.0% increase; 89.357 million tons of sulfuric acid, a 1.2% increase; 34.644 million tons of caustic soda, a 0.5% increase; 28.877 million tons of soda ash, a 7.6% increase; 406,000 tons of polysilicon, a 31.8% increase; 95.744 million tons of synthetic resins, a 9.3% increase; and 74.059 million tons of synthetic fiber monomers (polymers), a 9.9% increase. In addition, 842 million tire casings were produced, a 1.9% increase. 　　The total output of chemical fertilizers saw a slight rebound. In 2019, national fertilizer production saw a slight recovery after three consecutive years of decline; the output (on a pure basis, the same below) was 56.249 million tons, representing a year-on-year increase of 3.6%. Among them, the production of nitrogen fertilizers was 35.773 million tons, an increase of 5.3%; the production of phosphorus fertilizers was 12.117 million tons, a decrease of 6.9%; the production of potassium fertilizers was 7.622 million tons, an increase of 11.7%. The annual production of pesticide active ingredients (expressed as 100%) was 2.254 million tons, an increase of 1.4% compared to the previous year; among these, the production of herbicides (active ingredients) was 935,000 tons, with a growth rate of 0.4%. In addition, the output of agricultural plastic films was 852,000 tons, a decrease of 10.6%. 　　Capacity utilization rate is rising. In 2019, the capacity utilization rate in the oil and gas extraction industry was 91.2%, up 2.9 percentage points year on year; in the manufacturing of chemical raw materials and chemicals, it was 75.2%, an increase of 1.0 percentage point. (III) Steady and relatively rapid growth in energy consumption, with accelerated growth in major chemicals Data shows that in 2019, China’s total apparent consumption of crude oil and natural gas was 970 million tons (in oil equivalent), representing a year-on-year increase of 7.7%, a slowdown of 2.2 percentage points compared to the previous year. The total apparent consumption of major chemicals increased by approximately 5.0%, an acceleration of 2.8 percentage points. 　Crude oil consumption continues to grow rapidly, while natural gas growth slows down. In 2019, China’s apparent consumption of crude oil was 696 million tons, representing a year-on-year increase of 7.3%, with the growth rate rising by 0.5 percentage points compared to the previous year. The country’s dependence on imported crude oil was 72.6%. The apparent consumption of natural gas was 304.79 billion cubic meters, with an increase of 8.7%, but this figure represented a decrease of 8.5 percentage points compared to the previous year. Natural gas accounted for 28.3% of the total apparent consumption of crude oil and natural gas, while the country’s dependence on imported natural gas was 43.0%. From January to December, the apparent domestic consumption of refined oil products was 310 million tons, a 2.7% decline year-on-year, compared with a 2.6% increase in the previous year. Among them, the apparent consumption of diesel was 146 million tons, a decrease of 6.0%; the apparent consumption of gasoline was 125 million tons, a decline of 0.8%; the apparent consumption of kerosene was 38.78 million tons, an increase of 4.4%. 　　Consumption of basic chemical raw materials is picking up from a slow pace, while that of synthetic materials is increasing rapidly. Data shows that in 2019, the apparent total consumption of basic chemical raw materials increased by approximately 2.3%, an increase of 0.9 percentage points compared to the previous year. Among them, the growth rate of inorganic chemical raw materials was only 0.4%, while that of organic chemical raw materials was 5.9%. Among the major basic chemical raw materials, the apparent consumption of ethylene was 23.021 million tons, up 7.9% year-on-year; the apparent consumption of pure benzene was 10.521 million tons, down 7.2%; the apparent consumption of methanol was 60.088 million tons, up 6.8%; the apparent consumption of sulfuric acid was 87.713 million tons, with a slight decline of 0.2%; the apparent consumption of caustic soda was 35.567 million tons, up 1.6%; and the apparent consumption of soda ash was 27.629 million tons, up 7.3%. In 2019, the apparent total consumption of synthetic materials increased by approximately 9.6%, a pace that was 4.4 percentage points faster than the previous year. Among them, the apparent consumption of synthetic resins was 123 million tons, an increase of 10.3%; the total apparent consumption of synthetic fiber monomers (polymers) was 82.517 million tons, with a growth rate of 9.2%. 　　Fertilizer consumption rebounds. In 2019, the apparent consumption of chemical fertilizers across the country (on a pure basis, the same below) was 51.039 million tons, representing a 3.6% increase year-on-year; fertilizer consumption saw a slight rebound after declining for three consecutive years. Among them, the apparent consumption of nitrogen fertilizers reached 30.075 million tons, an increase of 2.2%; the apparent consumption of phosphate fertilizers was 7.646 million tons, a decrease of 6.6%; the apparent consumption of potash fertilizers amounted to 12.58 million tons, up 13.0%; and the apparent consumption of diammonium phosphate (in physical terms) was 8.236 million tons, reflecting a 4.0% rise. (IV) Slower growth in investment in the chemical industry According to data from the **Statistics Bureau, from January to December, fixed asset investment in the manufacturing of chemical raw materials and chemicals increased by 4.2% on a year-on-year basis, a decrease of 0.4 percentage points compared with the period from January to November, representing the lowest level for the year. During the same period, national industrial investment grew by 4.3%, an increase of 0.6 percentage points compared with the previous 11 months; for the first time that year, it surpassed the growth rate of investment in the chemical industry. (V) Slight decline in foreign trade
In 2019, the international trade environment became extremely severe and complex. Nevertheless, the import and export activities of China’s oil and chemical industries remained generally stable, experiencing only a slight decline. Moreover, this rate of decline showed signs of slowing down. Such results are hard-won. Customs data show that from January to December, the total value of imports and exports in the petroleum and chemical industry was 722.21 billion US dollars, a decrease of 2.8% compared with the previous year; this decline was 0.5 percentage points smaller than that in the first 11 months, accounting for 15.8% of the country’s total imports and exports. Of this, the total value of exports was 226.95 billion US dollars, a decrease of 1.8%; the total value of imports was 495.26 billion US dollars, with a decline of 3.3%. The trade deficit was 268.32 billion US dollars, a 4.6% decrease on a year-on-year basis. 　　In December, the total import and export value of the petroleum and chemical industry was 66.05 billion US dollars, representing a 2.2% increase on a year-on-year basis. Of this, exports amounted to 20.64 billion US dollars, representing a 1.1% increase; imports were 45.41 billion US dollars, with a growth rate of 2.7%. The trade deficit was 24.76 billion US dollars, an increase of 4.0% on a year-on-year basis. 　　Exports of rubber products continued to grow, while the growth rate of exports of refined oil and fertilizers slowed down. In 2019, the total value of rubber product exports was 48.25 billion US dollars, representing a slight increase of 0.3% compared to the previous year, while the growth rate in the previous year had been 3.3%. The total volume of exports was 10.211 million tons, showing an increase of 2.3%. The total export value of refined oil products (including gasoline, coal, and diesel) was 32.88 billion US dollars, representing a 9.4% increase, but this figure showed a significant decline compared to the previous year; the export volume was 55.376 million tons, with an increase of 20.2%. The total value of fertilizer exports was 7.34 billion US dollars, representing a 2.9% increase on a year-on-year basis, but this growth rate was 13.3 percentage points lower than that of the previous year; the volume of exports was 27.737 million tons (in terms of physical quantity), with an increase of 11.7%. 　　Crude oil imports continued to grow at a steady and rapid pace, while the growth rate of natural gas declined. In 2019, China imported 506 million tons of crude oil, a year-on-year increase of 9.5%; the growth rate slowed by 0.5 percentage points compared to the previous year, remaining around 10% for the third consecutive year. 134.8 billion cubic meters of imported natural gas were used, representing a 7.3% increase; the growth rate in the previous year had been over 30%. In December, 45.483 million tons of crude oil were imported, representing a 3.9% increase; 13.22 billion cubic meters of natural gas were imported, with a 3.5% rise. 　II. Industry Performance 　Overall, the decline in industry performance has slowed down. From January to December, the oil and chemical industry achieved a total profit of 668.37 billion yuan, a year-on-year decrease of 14.9%. This decline was 2.7 percentage points smaller than that recorded from January to November. The industry accounted for 10.8% of the total profits generated by all large-scale industrial enterprises nationwide during the same period. For every 100 yuan of operating revenue, the cost amounts to 82.67 yuan, an increase of 1.39 yuan year-on-year. Total assets reached 13.40 trillion yuan, up 7.7%. The debt-to-asset ratio stood at 55.92%, rising by 1.16 percentage points year-on-year. The total losses incurred by loss-making enterprises amounted to 132.08 billion yuan, a 9.7% increase compared to the previous year. The proportion of loss-making enterprises in the industry was 17.6%, down 1.4 percentage points from the first 11 months. In 2019, the industry-wide operating income margin was 5.45%, a decrease of 1.04 percentage points compared to the previous year; the gross margin was 17.33%, also down by 1.39 percentage points. The inventory turnover days for finished goods are 15.7 days; the average collection period for notes receivable and accounts receivable is 36.0 days. (1) The oil and gas extraction industry continues to show positive performance, with profit growth accelerating. By the end of December, there were 302 enterprises of significant size in the oil and gas extraction industry. These enterprises achieved a total profit of 162.86 billion yuan for the whole year, representing a 6.1% increase compared to the previous year; this growth rate was 5.8 percentage points higher than that of the first 11 months. Such enterprises accounted for 24.4% of the total profit generated by the oil and chemical industry. Among them, the total profit from oil extraction reached 117.44 billion yuan, a rise of 1.4%; the total profit from natural gas extraction amounted to 43.18 billion yuan, an increase of 2.8%. 　　Unit costs are rising at an accelerating pace, and the industry’s losses are continuing to decline. From January to December, the operating costs of the oil and gas extraction industry amounted to 760.54 billion yuan, representing a 4.7% increase on a year-on-year basis. The cost per 100 yuan of revenue was 68.94 yuan, reaching a new high in two years; this figure increased by 1.06 yuan compared to the period from January to November, and by 1.52 yuan on a year-on-year basis. Among them, for every 100 yuan of revenue generated from oil extraction, the cost amounts to 63.52 yuan, an increase of 1.03 yuan year-on-year; for natural gas extraction, the cost is 54.68 yuan per 100 yuan of revenue, up by 3.11 yuan. From January to December, the proportion of loss-making enterprises in the oil and gas extraction industry was 21.2%, a decrease of 8.4 percentage points compared to the first 11 months. The total losses incurred by these enterprises amounted to 25.20 billion yuan, a year-on-year decline of 39.1%. Total assets reached 2.54 trillion yuan, up 14.4%. The asset-liability ratio stood at 47.19%, an increase of 3.36 percentage points year-on-year. Notes receivable and accounts receivable totaled 96.07 billion yuan, down 4.3%. Funds tied up in finished goods amounted to 11.13 billion yuan, a decrease of 2.5%. The data also show that from January to December, the growth rate of financial expenses in the oil and gas extraction industry continued to accelerate significantly, reaching 73.5% and setting a new high for the year; meanwhile, administrative expenses declined by 11.1%. 　　From January to December, the operating profit margin in the oil and natural gas extraction industry was 14.76%, up 0.51 percentage points year-on-year; the gross profit margin stood at 31.06%, a decrease of 1.52 percentage points. The inventory turnover days for finished goods are 5.4 days, while the average collection period for notes receivable and accounts receivable is 29.6 days. 　(II) The decline in the profitability of the oil refining industry is stabilizing. The rate of profit decrease continues to narrow. As of the end of December, there were 1,124 large-scale enterprises in the oil refining industry. Their total cumulative profits amounted to 94.7 billion yuan, a year-on-year decrease of 42.1%. This decline was 7.1 percentage points smaller than that recorded in the first 11 months. These enterprises accounted for 14.2% of the total profits in the petroleum and chemical industries. 　　Unit costs have reached new highs, and the losses of loss-making companies have improved. In 2019, the operating costs in the oil refining industry totaled 3.35 trillion yuan, a year-on-year increase of 8.4%. The operating cost per 100 yuan of revenue was 83.16 yuan, up by 2.91 yuan from the previous year—the highest level in five years. From January to December, the loss rate in the refining industry was 26.1%, a decrease of 1.9 percentage points compared to the period from January to November. The total losses incurred by companies in this sector amounted to 19.99 billion yuan, representing a 71.0% increase on a year-on-year basis, with the growth rate declining by 13.8 percentage points compared to the previous 11 months. The total assets amounted to 2.59 trillion yuan, an increase of 19.7%, while the debt-to-asset ratio was 64.25%, up 4.46 percentage points on a year-on-year basis. From January to December, the oil refining industry had notes receivable and accounts receivable amounting to 210.29 billion yuan, a sharp increase of 92.1% on a year-on-year basis, with the growth rate rising by 20.7 percentage points compared to the previous 11 months; funds tied up in finished goods amounted to 96.87 billion yuan, showing a decrease of 0.7%. In addition, the financial expenses of the refining industry increased by 6.8% on a year-on-year basis, while administrative expenses declined by 8.6%. 　　From January to December, the operating profit margin in the oil refining industry was 2.35%, a year-on-year decrease of 1.90 percentage points; the gross profit margin stood at 16.84%, down 2.91 percentage points. The inventory turnover period for finished goods is 10.4 days; the average collection period for notes receivable and accounts receivable is 14.8 days. (III) Low performance in the chemical industry: Profits have declined significantly. Data shows that as of the end of December, there were 23,335 enterprises above a certain scale in the chemical industry, an increase of 61 compared to the end of the previous month. The total annual profit amounted to 397.84 billion yuan, a year-on-year decrease of 13.9%. This figure represents 59.5% of the total profits generated by the petroleum and chemical industries. Since the beginning of the new century, the chemical industry has experienced 3 periods of declining profits, with this being the biggest drop. Looking at the various major sectors, profits in specialty chemicals, paint (pigment) manufacturing, and rubber products continued to grow, with growth rates of 1.4%, 8.1%, and 9.7% respectively; profits in pesticide manufacturing remained unchanged. The profit decline in the manufacture of basic chemical raw materials remained significant, at 30.5%. The manufacturing of synthetic materials saw a decrease of 7.0%. Meanwhile, fertilizer manufacturing and mining and processing of chemical minerals declined by 38.0% and 22.5%, respectively. The sharpest drop was observed in the production of coal chemical products, which fell by 136.5%. 　　Unit costs have risen, while overall industry losses remain stable. In 2019, the operating costs of the chemical industry amounted to 5.83 trillion yuan, a decrease of 0.1% on a year-on-year basis; the cost per 100 yuan of revenue was 84.58 yuan, an increase of 0.69 yuan compared to the previous year. Among them, the cost per 100 yuan of revenue for the production of basic chemical raw materials is 85.18 yuan; for the production of synthetic materials, it is 87.16 yuan; for the production of specialty chemicals, it is 83.12 yuan; for the production of coatings (pigments), it is 78.68 yuan; for the production of fertilizers, it is 86.08 yuan; for the production of rubber products, it is 84.28 yuan; and for the production of coal chemical products, it is 91.15 yuan. From January to December, the loss rate in the chemical industry was 17.1%, an increase of 0.9 percentage points on a year-on-year basis. The total losses incurred by companies in this sector amounted to 84.15 billion yuan, a rise of 37.0%. The total assets were 7.86 trillion yuan, showing an increase of 2.8%, while the debt-to-asset ratio was 55.91%, a decrease of 0.37 percentage points compared to the previous year. From January to December, the chemical industry had accounts receivable and notes amounting to 952.33 billion yuan, a 2.1% increase on a year-on-year basis; while the funds tied up in finished goods amounted to 304.12 billion yuan, showing a 0.5% decline. In addition, financial expenses and administrative expenses decreased by 11.7% and 1.8%, respectively. 　　In 2019, the operating profit margin in the chemical industry was 5.78%, a year-on-year decrease of 0.87 percentage points; the gross profit margin stood at 15.42%, down 0.69 percentage points. The inventory turnover days for finished goods are 19.2 days; the average collection period for notes receivable and accounts receivable is 46.3 days. III. Trends in Key Markets In 2019, the oil and major chemicals markets experienced significant fluctuations and remained weak overall, with overall price levels falling again after two years of increases. However, market prices saw a significant rebound at the end of the year. According to price indices released by the Bureau of Statistics, in December, the factory gate prices for oil and natural gas extraction rose 5.8% year-on-year, following a 11.2% decline in the previous month; on a month-on-month basis, they increased by 3.8%. Meanwhile, prices in the chemical raw materials and chemicals manufacturing sector fell 5.4% year-on-year, a narrowing of 1.0 percentage point from the previous month; month-on-month, these prices decreased by 0.8%. From January to December, the ex-factory prices in the oil and natural gas extraction industry fell 3.6% year-on-year; in the chemical raw materials and chemicals manufacturing sector, the decline was 3.9%. 　(1) Continued rise in international oil prices In December, international oil prices continued to rise, with an intensifying upward trend. Monitoring data show that the average price of WTI crude oil (as per Platts spot prices, the same below) for that month was 59.53 dollars per barrel, up 4.1% on a month-on-month basis and 19.0% on a year-on-year basis; the average price of Brent crude oil was 67.03 dollars per barrel, up 6.1% month-on-month and 16.2% year-on-year; the average price of Dubai crude oil was 64.89 dollars per barrel, up 4.4% month-on-month and 12.2% year-on-year; the average price of Saudi Light crude oil was 69.23 dollars per barrel, up 4.8% month-on-month and 37.3% year-on-year. 　　International oil prices saw a significant decline in 2019. The average price of WTI for the whole year was 57.02 dollars per barrel, a decrease of 12.6% on a year-on-year basis; the average price of Brent crude was 64.26 dollars per barrel, with a decline of 9.9%; the average price of Dubai crude was 63.54 dollars per barrel, showing a drop of 8.8%; and the average price of Saudi Light crude was 60.59 dollars per barrel, with a decrease of 4.8%. The average annual crude oil price in the above four regions was $61.35 per barrel, a decrease of 9.1%. 　　The futures market remains on an upward trend. As of the end of December 2019, the average price of light crude oil for delivery in January 2020 on the New York Mercantile Exchange was $59.72 per barrel, a year-on-year increase of 22.0%. The average price for February was $59.61 per barrel, representing a 16.1% rise. Meanwhile, the average price of Brent crude oil for delivery in January in London was $65.08 per barrel, up 13.0% year-on-year; in February, it averaged $64.13 per barrel, an increase of 7.1%. The average price of crude oil delivered in January at the Shanghai Trading Center was 469.60 yuan per barrel, representing a 15.0% increase on a year-on-year basis; in February it was 467.69 yuan per barrel, with an increase of 13.4%. 　　In 2020, the global economy remained fragile, continuing to grow at a slow pace. Therefore, oil consumption will also remain relatively weak. Based on a comprehensive assessment of current developments in oil-producing regions such as the Middle East, trends in international crude oil prices, the global macroeconomic situation, and the development of new energy sources, it is anticipated that the international crude oil market will experience relatively low-level fluctuations during the first quarter of 2020. Throughout the year, crude oil prices are expected to remain roughly at the previous year’s level; the average spot price of WTI is projected to be around $60 per barrel, while that of Brent is expected to be approximately $65 per barrel. (II) The market for basic chemical raw materials continued to fluctuate. In December, the market for these raw materials remained at low levels, with overall price declines slowing down and trends varying among different products. Among them, organic chemical raw materials have shown a relatively noticeable rebound trend. That month, among the 39 major inorganic chemical raw materials under monitoring, the average market price increased year-on-year for 15 of them, one more than the previous month; it increased month-on-month for 14 of them, remaining unchanged from the previous month. The average price increased on an annual basis for 16 of them, accounting for 41.0%. Among the 84 major organic chemical raw materials under monitoring, 20 saw year-on-year price increases, an increase of 6 compared to the previous month; 35 had month-on-month price increases, with 1 decrease; 14 had higher average prices throughout the year, accounting for 16.7%. 　　Inorganic chemical raw materials: In December, the average market price of sulfuric acid (98%, purified) was 250 yuan per ton, up 8.7% on a month-on-month basis but down 41.9% on a year-on-year basis; the annual average price was 312 yuan per ton, a decrease of 22.6%. The average market price of nitric acid (≥98%) was 1610 yuan per ton, down 3.0% on a month-on-month basis and 10.6% on a year-on-year basis; the annual average price was 1672 yuan per ton, a decrease of 0.8%. The average price of caustic soda ( Caustic soda, ≥96%) was 2770 yuan per ton, down 5.5% on a month-on-month basis and 31.6% on a year-on-year basis; the annual average price was 3220 yuan per ton, a decrease of 24.1%. The average price of soda ash (heavy ash) was 1710 yuan per ton, down 4.5% on a month-on-month basis and 13.6% on a year-on-year basis; the annual average price was 1883 yuan per ton, a decrease of 4.1%. The average price of calcium carbide was 2680 yuan per ton, down 1.5% on a month-on-month basis and 1.5% on a year-on-year basis; the annual average price was 2799 yuan per ton, a decrease of 3.4%. The average price of sulfur was 570 yuan per ton, down 12.3% on a month-on-month basis and 57.8% on a year-on-year basis; the annual average price was 881 yuan per ton, a decrease of 28.3%. 　　Organic chemical raw materials: In December, the average price of ethylene in the Northeast Asia market was 759.4 dollars per ton, a 2.9% decrease on a month-on-month basis and a 19.1% decline on a year-on-year basis; the annual average price was 894.3 dollars per ton, representing a 29.3% drop. In the domestic market, the average price of propylene was 6,910 yuan per ton, up 1.5% on a month-on-month basis but down 12.4% on a year-on-year basis; the annual average price was 7,278 yuan per ton, representing a decline of 15.6%. The average price of pure benzene was 5,330 yuan per ton, up 2.1% on a month-on-month basis but down 13.9% on a year-on-year basis. The average price of toluene (petroleum grade, purified) was 5,620 yuan per ton, down 1.8% on a month-on-month basis but up 21.4% on a year-on-year basis; the annual average price was 4,972 yuan per ton, indicating a decline of 22.7%. The average price of methanol was 2,120 yuan per ton, down 1.9% on a month-on-month basis and 11.3% on a year-on-year basis; the annual average price was 2,178 yuan per ton, with a decline of 25.4%. The average price of ethylene glycol (high-quality grade) was 5,050 yuan per ton, up 5.4% on a month-on-month basis but down 18.7% on a year-on-year basis; the annual average price was 4,814 yuan per ton, reflecting a decline of 33.7%. 　　In 2019, the demand for basic chemical raw materials showed overall low-speed growth, with significant variations. Among them, the consumption growth rate of organic chemical raw materials is relatively fast, while that of inorganic chemical raw materials is almost zero. Due to the continued high levels of imports of organic chemical raw materials, market pressure is increasing, competition is growing fiercer, and prices have remained weak for a long time. Data shows that the annual import of organic chemical raw materials exceeded 60 million tons, representing a growth rate of 3.1%, with this trend showing an upward trajectory. Currently, the markets for major raw material commodities such as international crude oil and coal are generally on an upward trend, which provides some support for the prices of petrochemical products. Analyses suggest that in 2020, the demand for basic chemical raw materials will generally continue to show slow growth, with price trends remaining divergent; overall price levels for the year are expected to see a slight increase compared to the previous year. 　(III) Slight rebound in the synthetic materials market In December, the synthetic materials market saw a slight rebound overall due to rising oil prices; prices were highly volatile, and the market continued to show divergence. Among them, the synthetic rubber market is performing relatively well. 　　Synthetic resins: In December, the average market price of polyvinyl chloride (LS-100) was 7,450 yuan per ton, up 2.6% on a month-on-month basis and 8.8% on a year-on-year basis; the annual average price was 7,128 yuan per ton, representing a 1.8% increase. The average price of high-density polyethylene (5000S) was 7,920 yuan per ton, up 0.8% on a month-on-month basis but down 21.6% on a year-on-year basis; the annual average price was 8,835 yuan per ton, indicating a 19.7% decline. The average price of polypropylene (T30S) was 8,120 yuan per ton, down 4.4% on a month-on-month basis and 14.1% on a year-on-year basis; the annual average price was 8,777 yuan per ton, with a 9.4% decrease. The average price of PA66 (101L) was 23,070 yuan per ton, down 0.1% on a month-on-month basis and 36.8% on a year-on-year basis; the annual average price was 27,449 yuan per ton, reflecting a 17.2% decline. The average price of POM (F20-03) was 11,300 yuan per ton, down 4.2% on a month-on-month basis and 15.0% on a year-on-year basis; the annual average price was 12,633 yuan per ton, indicating a 16.6% decline. The average price of polyester chips (filament-grade, semi-gloss) was 6,210 yuan per ton, up 4.4% on a month-on-month basis but down 23.5% on a year-on-year basis; the annual average price was 7,008 yuan per ton, with a 17.3% decrease. 　　Synthetic rubber: In December, the average price of styrene-butadiene rubber (grade 1) was 11,280 yuan per ton, up 3.5% on a month-on-month basis and down 2.8% on a year-on-year basis; the annual average price was 11,305 yuan per ton, representing a decline of 11.2%. The average price of styrene-butadiene rubber (1502) was 11,510 yuan per ton, up 5.0% on a month-on-month basis and down 0.8% on a year-on-year basis; the annual average price was 11,134 yuan per ton, with a decline of 10.2%. The average price of nitrile rubber (26A) was 16,210 yuan per ton, up 3.9% on a month-on-month basis but down 19.4% on a year-on-year basis; the annual average price was 17,909 yuan per ton, indicating a decline of 16.4%. The average price of neoprene rubber (A-90) was 33,400 yuan per ton, with a slight decrease of 0.3% on a month-on-month basis and an increase of 22.3% on a year-on-year basis; the annual average price was 31,258 yuan per ton, representing an increase of 11.5%. Synthetic fiber raw materials: In December, the average market price of caprolactam (≥99.9%) was 10,950 yuan per ton, up 1.4% on a month-on-month basis but down 21.2% on a year-on-year basis; the annual average price was 12,298 yuan per ton, representing a 21.2% decline. The average price of acrylonitrile (≥99.9%) was 11,600 yuan per ton, up 0.9% on a month-on-month basis but down 6.0% on a year-on-year basis; the annual average price was 12,233 yuan per ton, with a 18.1% decline. The average price of purified terephthalic acid was 4,830 yuan per ton, down 0.8% on a month-on-month basis and 28.3% on a year-on-year basis; the annual average price was 5,782 yuan per ton, indicating a 11.5% decline. 　　In 2019, consumption in the domestic synthetic materials market grew rapidly, reaching a new high in recent years; in particular, synthetic resins saw continued strong growth, with an increase of over 10%. At the same time, imports of synthetic materials also increased rapidly and in large quantities, with annual imports exceeding 52 million tons, representing a growth rate of 8.4%. Competition in the domestic market is fierce, with low prices. Based on an analysis of current market conditions and trends in international oil prices, in the first quarter of 2020, the synthetic materials market is expected to remain relatively weak overall, with prices fluctuating at low levels. However, prices are anticipated to rise somewhat compared to the fourth quarter of the previous year. (IV) The fertilizer market remains weak. In December, the domestic fertilizer market continued to show weakness; prices of major varieties fluctuated, but generally remained at low levels. Monitoring data showed that the average price of urea in that month was 1,680 yuan per ton, a decrease of 3.4% on a month-on-month basis and 14.7% on a year-on-year basis; the annual average price was 1,892 yuan per ton, representing a decline of 5.2%. The average price of diammonium phosphate was 2,250 yuan per ton, with a month-on-month drop of 2.6% and a year-on-year decline of 16.4%; the annual average price was 2,549 yuan per ton, indicating a decline of 4.4%. The average price of ammonium phosphate was 1,930 yuan per ton, with a month-on-month decrease of 2.0% and a year-on-year decline of 15.4%; the annual average price was 2,138 yuan per ton, reflecting a decline of 6.1%. The average price of domestically produced potassium chloride was 2,220 yuan per ton, with a month-on-month increase of 1.8% but a year-on-year decline of 8.3%; the annual average price was 2,322 yuan per ton, representing an increase of 1.8%. The average price of 45% sulfur-based compound fertilizer was 2,140 yuan per ton, with a month-on-month drop of 2.7% and a year-on-year decline of 10.1%; the annual average price was 2,267 yuan per ton, indicating a decline of 6.8%. 　　In 2019, the supply and demand in China’s fertilizer market remained largely stable, with a slight rebound in consumption. Export growth was high at the beginning of the year but slowed down later on. The problem of overcapacity remained prominent, while pressure on the domestic market continued to intensify. Costs stayed at high levels, prices fluctuated downward, and corporate profitability kept deteriorating. Based on market and price trends, it is expected that in the first quarter of 2020, the overall weak market condition for domestic fertilizer prices will not change significantly; supply and demand will remain balanced, prices will stay at relatively low levels, with little fluctuation. (V) Decline in the tire market In December, the domestic tire market experienced fluctuations, with prices generally falling compared to the previous month. Market monitoring shows that the average price of load-bearing radial tires (12.00R20-18PR) in that month was 2,226 yuan per tire, a 1.2% decrease on a month-to-month basis and a 3.8% increase on an annual basis; the annual average price was 2,243 yuan per tire, representing a 3.9% increase. The average price of car radial tires (215/55R16) was 618 yuan per tire, with a 1.1% drop on a month-to-month basis and a 6.7% increase on an annual basis; the annual average price was 615 yuan per tire, reflecting a 7.5% increase. The average price of light truck bias-ply tires (7.50-16-14PR) was 673 yuan per tire, with a 1.2% decrease on a month-to-month basis and a 2.7% increase on an annual basis; the annual average price was 682 yuan per tire, indicating a 4.4% increase. 　　In 2019, the domestic tire market performed relatively well overall, with prices rising to varying degrees, while exports remained relatively stable. The supply and demand situation in the market improved, and the profitability of the industry saw a noticeable improvement. However, at present, the pressure for a recovery in the tire market is increasing, and trends are showing divergence. It is expected that the domestic tire market will remain relatively stable in the first half of 2020, with prices rising steadily and showing little volatility. IV. New Developments, New Issues, and Projections for Key Economic Indicators in 2020 (I) New developments and new issues in the current economic landscape First, the world economy is expected to maintain low growth rates in 2020, still facing severe challenges. Recent reports issued by international authoritative institutions such as the World Bank, the United Nations, and the International Monetary Fund show that the global economic growth rate in 2019 was the lowest it has been in 10 years, and it is expected that the growth rate in 2020 will remain roughly the same as that of the previous year, or may even increase slightly. Overall, the world economy may stabilize in 2020, but it also faces severe challenges. First, trade frictions will continue. Although the United States and China have signed a first-phase trade agreement, the problems are far from resolved; the United States and Europe remain at an impasse; North America seems to have reached an agreement, but some deep-seated issues remain unsolved. In short, the trade war may ease in 2020, but frictions will continue, and the negative impacts caused earlier will still persist. Second, regional tensions may intensify. In the new year, the Middle East is likely to become even more turbulent; tensions between the United States and Iran, as well as between Israel and Palestine, will intensify further. The U.S.’s new plan for peace in the Middle East is unlikely to succeed, and such conflicts will occur more frequently. Third, turmoil among the major regional powers. In particular, turmoil in the major emerging economies will have a cascading effect on the global economy. 　　Second, the chemical market is weak, with prices remaining low. Data shows that in December, the ex-factory price index for the manufacturing of chemical raw materials and chemicals declined at a slower pace than the previous month, but it still reached 5.4%. In 2019, the market prices of some major basic chemical raw materials and synthetic materials continued to fall sharply. For example, among the market prices of 84 major organic chemical raw materials monitored, the annual average price dropped by over 83% for more than 83% of them, and those with a price decline of 20% or more accounted for 35%; the prices of most major types of synthetic materials all declined. A weak market has caused the profitability of the chemical industry to remain at low levels for an extended period. 　　Third, the unit cost remains high. From January to December, the increase in operating costs across the industry was 3.1%, which was 1.8 percentage points higher than the increase in operating revenue; while the cost per 100 yuan of operating revenue rose by 0.12 yuan compared to the previous 11 months, it increased by 1.39 yuan on a year-on-year basis. Among them, in the chemical industry, the cost per 100 yuan of revenue increased by 0.69 yuan on a year-on-year basis, while in the refining industry it increased by 2.91 yuan. High costs remain persistent, severely restricting the recovery of the industry’s economic performance. 　　Fourth, import pressure in the petrochemical market continues to increase. In 2019, China’s imports of petrochemical products continued to grow at a rapid pace. Data shows that the net import of organic chemical raw materials for the whole year was 44.486 million tons, representing a growth rate of 2.4%; this growth rate has been accelerating since the second half of the year. Imports of synthetic materials saw an even sharper increase, with net imports reaching 41.009 million tons and a growth rate of 9.3%, the highest increase since 2010. The data also shows that in 2019, the import of synthetic resins amounted to 33.668 million tons, representing a growth rate of 12.4%; the increase in imports in December alone was as high as 26.3%. Due to the large volume of imports, competition in the domestic petrochemical industry is fierce, prices remain low, and many companies are struggling to survive. 　　Fifth is the impact of the COVID-19 pandemic on the industry. At the beginning of 2020, with the outbreak of the novel pneumonia epidemic, various regions **gradually implemented prevention and control measures. This led to new problems in the production and sales of various chemical products. On one hand, large upstream enterprises continued to produce, but sales and logistics were hindered, forcing these manufacturers to reduce their production levels and disrupting normal operations. On the other hand, various isolation measures caused a sharp decline in market demand, resulting in many end-users shutting down their operations or delaying production starts. Overall, in the first quarter, production and sales of key products such as refined oil and chemical products are expected to decline significantly. However, once the pandemic is over, demand from downstream industries is likely to rebound sharply. Over the past few years, the apparent consumption of petrochemical products in China has been on the rise, and this imbalance between supply and demand will drive up prices of chemical products. After the second quarter, the market is set to experience new growth, with rising prices increasing profits for companies in this industry. (II) Projections for the growth of key economic indicators Based on an analysis of macroeconomic trends, industry production and price dynamics, structural adjustments, as well as factors such as the COVID-19 pandemic, it is estimated that the economic performance of the oil and chemical industry in 2020 will show a trend of low levels at the beginning followed by an upward trend as the situation stabilizes. It is preliminarily predicted that the total revenue of this industry for the whole year will increase by around 5%, with the revenue of the chemical industry alone expected to rise by approximately 7%. 　　The total profit of the petroleum and chemical industry is expected to increase by around 8% on a year-on-year basis for the whole year. 　　It is expected that the total import and export volume of the petroleum and chemical industry in 2020 will increase by about 3% on a year-on-year basis, with exports growing by around 5%. 　　It is estimated that in 2020, the apparent consumption of crude oil will increase by about 5.5% on a year-on-year basis; the apparent consumption of natural gas will rise by around 7%; the apparent consumption of refined oils will increase by approximately 3%, with the apparent consumption of diesel remaining roughly the same as in the previous year. The apparent consumption of fertilizers will stay at the same level as last year or decline slightly; the total apparent consumption of synthetic materials will increase by about 7%; the apparent consumption of ethylene will rise by around 8%; and the apparent consumption of caustic soda will increase by about 3%.