Economic Operation of Petroleum and Chemical Industry declined greatly in Q1

China Petroleum and Chemical Industry Federation recently released the first quarter industrial economic operation report. The report shows that because the Pandemic of COVID-19 in the first quarter has been expanding continuously, the overall economic performance of the Chinese industry declined significantly, but production rebounded significantly in March.

In the first quarter, China's oil and gas production grew steadily and rapidly, and the decline of major chemicals narrowed; market consumption showed signs of stabilizing, and foreign trade was better than expected; in the near future, the resumption of production in various industries continued to accelerate. However, the decline of industry investment is still large, the market is volatile, and the demand for chemicals is still relatively low; the cost of enterprises is high, and the benefit is greatly reduced; and the international macroeconomic environment tends to be severe.

From the completion of main economic indicators, from January to March, the added value of petroleum and chemical industry dropped by 7.2% year on year; the main business income was 2.42 trillion yuan, down 13.5%.

Specifically, energy production has maintained steady and rapid growth, and the decline in the output of major chemicals has narrowed. From January to March, the total output of crude oil and natural gas in China was 92.053 million tons (oil equivalent), up 5.4% year on year, 0.2% lower than that in the previous two months; the total amount of main chemicals decreased by 3.4%, 1.7% lower than that in the previous two months.

The growth of energy consumption is basically stable, and the decline of major chemicals has stabilized. From January to March, the total apparent consumption of crude oil and natural gas in China reached 249 million tons (oil equivalent), a year-on-year increase of 4.7%, a drop of 0.3% compared with the previous two months; the total apparent consumption of major chemicals decreased by about 3.5%, a decrease of 1.3%.

Investment in the industry has declined significantly. From January to March, the investment in fixed assets in the chemical raw materials and chemical products manufacturing industry decreased by 30.8% year-on-year. Although the decrease was 2.2% lower than that in the previous two months, it was still large. Investment in oil and gas exploration increased by 1.4%, down 0.9%.

The total volume of import and export trade decreased slightly. From January to March, the total import and export volume of the whole industry reached US $166.98 billion, down 4% year on year, 0.5% higher than that in the previous two months. It is worth noting that the export volume in March increased by 5.3% year on year.

Industry benefits continue to decline. From January to March, the total profit of the whole industry was only 39.19 billion yuan, a year-on-year decrease of 74.1%, 23.4% higher than that of the previous February, accounting for 5% of the total profit of the national scale industry in the same period.