Outlook for the export situation of the chemical industry in 2023: pressure and opportunity coexist

     In recent years, Sinopec's production capacity has been in a state of rapid expansion, and the supply and demand pattern of some products has changed during the expansion cycle. Overcapacity has increased its dependence on the export market to a certain extent. In 2022, the export value of China's petroleum and chemical products will increase by 27.5%, of which the total export value of organic chemicals will be 80.7 billion US dollars, a year-on-year increase of 17%, and the trade surplus will be 29 billion US dollars, a year-on-year increase of 216%. In 2023, the export of China's chemical products will face the impact of factors such as the economic downturn of major economies such as Europe and the United States, resulting in weakening demand, and the decline in cost advantages caused by the decline in the price of major energy products. Driven by the growing demand, it may form a certain degree of hedging for the above risk factors.

     Dragging factor 1: Europe and the United States are the main destinations of my country's petrochemical product exports, and the risk of economic downturn will have a negative impact on my country's exports

     Global inflation is running at a high level, global trade uncertainty is increasing, and the total overseas demand is gradually decreasing. At the same time, the monetary tightening of major overseas economies may continue until the first half of 2023, and its impact on demand will continue to appear, which will be unfavorable The most important factor for China's chemical exports.

     The recent employment data released by the United States far exceeded market expectations, and the unemployment rate fell to the lowest level since 1969. However, the CPI rose by 6.4% year-on-year, and the month-on-month increase rose to the highest in three months, indicating that the pace of decline in US inflation has slowed down. slow. High inflation may prompt the Federal Reserve to raise interest rates to a higher-than-expected level, and interest rates may stay at high levels for longer, which will cause economic growth this year to be well below trend.

     The European Commission released the "Winter 2023 Economic Forecast" on February 13 local time, raising the economic growth forecasts for the EU and the Eurozone this year to 0.8% and 0.9% respectively. The previously released autumn economic forecast report predicts that the EU and euro zone economies will both grow by 0.3% in 2023. However, the current economic recovery in Europe is still fragile and uneven, and the EU still faces many challenges in the future, such as the tense geopolitical situation. Moreover, core inflation was still rising in January, further eroding households' purchasing power. Monetary tightening will continue as inflationary pressures persist, weighing on business activity.

     The proportion of my country's organic chemicals exported to the EU and the United States is 22% and 14% respectively (see Figure 1). In the export scale of plastics and products, rubber and products, the proportion of the above two places has reached more than 30%. As the demand in Europe and the United States weakens, it will inevitably have a certain impact on my country's exports in the future.

Dragging factor 2: With the reduction of energy costs, some European chemical enterprises resume production or reduce the quantity of imported products to my country to a certain extent

In 2022, affected by the geopolitical situation, the global energy system will be severely challenged, especially in Europe, which will suffer from a relatively serious energy crisis. In addition to the impact of rising crude oil, the price of natural gas in Europe also rose sharply for a time, leading to a significant increase in the production costs of local chemicals in Europe. wide rise. In this context, the price difference between some chemical products in China and Europe has widened, which has led to a significant increase in the export volume of corresponding products. In 2022, the European chemical industry will experience a trade deficit for the first time, changing from a net chemical exporter to a net importer. In addition, the share of other countries' imports from Europe has declined, while China has replaced its share, which is also an important reason for my country's chemical exports to exceed expectations. With the warm winter in Europe and the gradual easing of energy supply problems in the fourth quarter of 2022, European production will pick up, and the return of high energy-consuming enterprises will gradually reduce imports.

     On the whole, in 2023, due to the slowdown in global economic growth, especially the risk of recession in major economies such as Europe and the United States, the growth of overseas chemical demand growth will face certain pressure, and the impact of supply chain shocks caused by falling energy prices will weaken. my country's chemical exports are facing certain challenges. In addition, the current trend of further evolution of "anti-globalization" is obvious, coupled with the uncertainty of the geopolitical situation, it will also affect my country's product exports, including chemicals, to a certain extent. However, with the significant drop in the price of sea freight and the improvement of logistics and transportation, the key blocking points affecting export trade in 2022 have been effectively resolved. In addition, RCEP trade terms and tariff dividends will be further released, and the economic recovery of relevant countries in the region is relatively optimistic, which can offset the impact of declining demand in Europe, America and other places to a certain extent. Looking forward to 2023, my country's chemical export opportunities and challenges coexist. Although there is a possibility of decline, the range will be relatively limited.