In the second quarter of 2024, the average price of Brent crude oil rose, and it is expected that upstream oil exploration and development companies will benefit. Crude oil experienced a top reversal in April and May, and it is expected that refining and chemical enterprises may face certain inventory loss pressures. Looking at the chemical price difference, the aromatics price difference in Q2 2024 remains high, and the price differences of products such as butadiene and PA6 have improved significantly. It is expected that industry chain enterprises will benefit from profits.
Zhongtong Finance APP learned that Haitong International released a research report stating that in the second quarter of 2024, the average price of Brent crude oil rose, and upstream oil exploration and development companies are expected to benefit. Crude oil experienced a top reversal in April and May, and it is expected that refining and chemical enterprises may face certain inventory loss pressures. Looking at the chemical price difference, the aromatics price difference in Q2 2024 remains high, and the price differences of products such as butadiene and PA6 have improved significantly. It is expected that industry chain enterprises will benefit from profits.
Haitong International's main viewpoints are as follows:
Oil price: Fall first and then rise in Q2 2024, and the average price increases.
From April to early June 2024, as the geopolitical tension eased and the expectation of a US interest rate cut was postponed, international oil prices fell from a high of $91.17 per barrel to a low of $77.52 per barrel. After ****, OPEC+ reaffirmed its production reduction stance, and the peak summer fuel demand in the United States approached, causing international oil prices to stabilize and rebound. As of June 20th, Brent crude oil prices have recovered to $85.71 per barrel, and the Q2 2024 quarterly average price is $84.96 per barrel, a year-on-year increase of 9.3% and a month-on-month increase of 3.9%.
Gas price: Overseas quarterly gas prices in Q2 2024 rose month-on-month, and domestic gas prices fell.
Affected by factors such as summer heat and Norwegian natural gas supply shortages, the quarterly average prices of overseas natural gas in Q2 2024 have increased. As of June 20th, the quarterly average prices of natural gas in the UK, the United States and the Asia-Pacific region in Q2 2024 were 9.85/2.00/11.10 US dollars/million BTU, a year-on-year decrease of 6.0%/-6.0%/+1.8%, and a month-on-month increase of 12.8%/0.5%/19.2%, respectively. Affected by the off-season demand, the price of domestic LNG has fallen. As of June 20th, the quarterly average price of LNG in China was 4174 yuan/ton, a year-on-year decrease of 1.9% and a month-on-month decrease of 11.6%.
Petrochemical products: The aromatics price difference remained high in Q2 2024, and the price differences of products such as butadiene and PA6 improved significantly.
In Q2 2024, the average cracking price difference of gasoline in Singapore was 8.72 US dollars per barrel, a year-on-year decrease of 27.7% and a month-on-month decrease of 34.2%; the average cracking price difference of diesel in Singapore was 14.37 US dollars per barrel, a year-on-year decrease of 7.3%, and a month-on-month decrease of 37.4%. The average cracking price difference of aviation kerosene in Singapore was 12.75 US dollars per barrel, a year-on-year decrease of 7.7%, and a month-on-month decrease of 39.1%.
In Q2 2024, the aromatics industry chain price differences remained at a high level. As of June 21st, the quarterly average price differences of pure benzene, toluene, xylene and naphtha were expanded by 22.0%, 24.0% and 5.7% respectively on a month-on-month basis. Among the C4 industry chain, butadiene was affected by industry concentration maintenance and a drop in the unplanned shutdown of some units, resulting in a significant improvement in price difference. As of June 21st, the quarterly average price difference between butadiene and naphtha in Q2 2024 was 702 US dollars/ton, a year-on-year increase of 174.8% and a month-on-month increase of 42.8%.
In addition, the average price difference between PA6 and caprolactam in Q2 2024 was 1549 yuan/ton, a year-on-year increase of 42.2% and a month-on-month increase of 26.3%. The price difference between ethylene and naphtha remains low. The Q2 2024 quarterly average price difference (as of June 21st) was 184 US dollars/ton, a year-on-year decrease of 24.4% and a month-on-month decrease of 15.5%.
Investment suggestions: It is recommended to pay attention to (1) high dividend petrochemical central enterprises such as CNOOC (600938.SH), PetroChina (601857.SH), Sinopec (600028.SH), etc., that are expected to maintain good profits; (2) undervalued leading refining and chemical companies such as Hengli Petrochemical (600346.SH), Rongsheng Petrochemical (002493.SZ), Xinfengming Group (603225.SH), Tongkun Group (601233.SH), Qixiang Tengda Chemical (002408.SZ), etc.
Risk warning: Large fluctuations in crude oil prices; decline in petrochemical product prices and price differentials; projects under construction progress slower than expected.
Risks: large fluctuations in crude oil prices; declining prices and differentials of petrochemical products; delayed progress of construction projects.