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China Oil Presentation Slides To Use
China Oil Presentation Slides To Use
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China oil market 2017
Where is the dragon heading?
Liao Na
Vice President, China, ICIS
PRESENTATION SLIDES FROM THE CHINA MARKET SEMINAR ON 27 SEPTEMBER 2017 www.icis.com 4
China’s economic structure migration and impact on
petroleum market
www.icis.com 5
Migration 1: KPI shifts from quantity to quality
Economic growth from aggressive to sustainable
8.0%
5.5%
7.0%
6.0%
4.9%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
2015 2016 2017E 2018E 2019E 2020E 2021E 2022E 2025E 2030E 2035E 2040E
www.icis.com 9
China urban agglomeration map
www.icis.com 10
Migration 4: momentums shifts from secondary to tertiary
43.1%
50.5%
59%
68%
75%
3rd sector
2nd sector
1st sector
46.8%
40.5%
34%
27%
22%
www.icis.com 12
Curb on fossil-fuel powered vehicles
Brand NEV sales target China strategy
Netherlands 2025
400,000 units by 2020;
20-30% of total vehicle sales
1.5m units by 2025, mostly battery
Norway 2025 would be NEV by 2025
electric vehicles (BEV)
China 2035?? 2/3 of total vehicle sales would be hybrid electric vehicles (HEV) to make
NEV by 2030 up 50% by 2020
UK 2040
HEV and PHEV to account for China made 2 plug-in hybrid electric
France 70% of total sales by 2050; FCV vehicle (PHEV) models by 2018; to
2050
and EV to make up 30% promote EV by joint-ventures
Sweden * 2050
20% of total vehicle sales would
To launch several budget EV models
be EV by 2020
Europe * 2050
10% of total vehicle sales would be
2010 2030 2050 300,000 units by 2020 NEV by 2020; to launch 9 NEV models
in China
* Likely timetables
Source: ICIS, company websites www.icis.com 13
China’s car forecast
2018 2019
2016 2017 YOY
CAGR Passenger Cars EV HEV growth growth
10.3 bil
1.2 bil yuan 736% 73% 33%
2015-2020E 11% 64% 49% Shared yuan
bike* 209mil
28mil users 646% 43% 26%
2020-2025E 6% 26% 23% users
The population of electric vehicles and hybrid electric Rough calculation: shared transportation to replace
vehicles is expected to reach 81.2m units and 10.7m 500kt – 1,000kt gasoline demand in 2017, while the
units respectively by 2040, posting a CAGR of 23% and impact will grow up to 4mil ton by 2020
18%, respectively.
www.icis.com 14
China’s gasoline demand
20,000
Gasoline surplus
250,000
15,000
200,000
10,000
150,000
5,000
100,000
50,000 0
0 (5,000)
2018E
2020E
2022E
2024E
2026E
2028E
2030E
2032E
2034E
2036E
2038E
2040E
2010
2012
2014
2016
Source: ICIS
Source: ICIS (10,000)
50.0
million tonnes
0.0
-50.0
-100.0
-150.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
North America South & Central America Europe Former USSR
Africa Middle East Northeast Asia Asia & Pacific
180,000
160,000
140,000
120,000
100,000
2018E
2020E
2022E
2024E
2026E
2028E
2030E
2032E
2034E
2036E
2038E
2040E
2010
2012
2014
2016
Source: ICIS
50.0
0.0
-50.0
-100.0
-150.0
-200.0
-250.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
North America South & Central America Europe Former USSR
Africa Middle East Northeast Asia Asia & Pacific
NE Asia and Former USSR are the key surplus regions in the largely oversupplied market
in the short term;
IMO implementation in 2020 is however expected to tilt the global balance to deficit again
www.icis.com 18
Cleaner energy plan and development of substitutes
www.icis.com 19
China’s changing energy mix: less coal, more clean
www.icis.com 20
China’s natural gas consumption structure
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E
www.icis.com 21
China’s natural gas demand to see robust growth
Status Quo & Forecast of China’s Natural Gas Supply & Demand (2012-2021E)
4,000 bcm 产量
Output 净进口量
Net imports
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2012 2013 2014 2015 2016 2017E 2018E 2019E 2020E 2021E
Source: NBS, ICIS China
www.icis.com 24
China replaces US as largest crude oil buyer
60 m tonnes
Strategic & commercial crude inventory (number of days)*
50
40
30
20
10
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2017 2017 2017
Source: NBS, GAC, OGP, ICIS Crude throughput Net imports Production
China’s crude imports in the first eight months of 2017 increased by 12.3% year on year to 281m tonnes
Lower domestic crude production and higher crude throughput of refineries, as well as oil injection into
Jinzhou SPR base led to the high imports. www.icis.com 25
Independents as main contributor in throughput growth
45000
60000
100% 85%
40000
90% 80%
50000
35000
75%
80%
40000 30000
70%
70%
25000
65%
60%
30000 60%
50%
20000
55%
20000
40% 15000
50%
30% 10000
45%
10000
20% Shandong independents 5000
40%
Shandong independents
Sinopec & PetroChina Sinopec & PetroChina
0 0
2014 2015 2016 2016 (Jan-Sept) 2017 (Jan-Sept)
Sinopec PetroChina
Sinopec PetroChina
Other majors Independents
Source: ICIS China
Other majors Independents
www.icis.com 26
Independents take more shares in throughput Environmental audit
100%
90%
80%
70%
60%
50%
40%
30%
Throughput cut by
Sinopec
20%
10%
0%
www.icis.com 27
Crude import by independent refiners
Unit: '000 tonnes
8000
7000
6000
5000
4000
3000
2000
1000
2017 YTD crude imports Unused quotas for 2017 Imported crude throughput ceiling Import crude throughput ceiling pending NDRC approval
20
15
22%
22% 10
5 Sulphur
76%
1000
74%
800
72%
600 70%
68%
400
66%
200
64%
0 2017E 62%
2018E
2019E
2020E
2021E
2022E
2023E
2024E
2025E
2026E
2027E
2028E
2029E
2030E
2031E
2032E
2033E
2034E
2035E
2036E
2037E
2038E
2039E
2040E
2010
2011
2012
2013
2014
2015
2016
China’s refinery expansion will slow down. No new refining projects after 2025
Average run rate of Chinese refineries (independent refiners included) will inch up to 70-76% after 2020, which
indicates 25-30% oversupply in domestic refining capacity
Crude throughput is expected to rise to over 600m tonnes by 2019 and over 790m tonnes by 2040 www.icis.com 30
Near 70% crude would be imported by 2021
'000 bbl/day
14,000 70%
12,000
65%
10,000
60%
8,000
55%
6,000
4,000 50%
2017E 2018E 2019E 2020E 2021E
Environment and tax are the sharpest swords on the oil & refining sectors, esp for
independent refineries
Excess capacity of most of industries to speed up clearing
China is to see a wide increase of general product prices due to higher environmental &
operational cost
China’s new economic drivers are: new investment (industrial transformation
investment), new consumption (final consumption) and new export (one-belt-one-road)
China to see its oil peak since 2030 whether in sake of cleaner air or state energy
security
Investment relative to new energy & EP technology will see booming opportunities
New demand will come along with anything relative to improve life quality and
experience
www.icis.com 32
ICIS China Oil and Refinery Solutions
We provide an end-to-end market data solution for China’s dynamic oil market – crude/petroleum, gasoline/naphtha, gasoil
and so much more
>> ENQUIRE ABOUT THE REPORT >> ENQUIRE ABOUT THE REPORT
China oil market 2017:
Hidden force in a confined market
Li Li
Head of Asia Oil Analytics, ICIS
PRESENTATION SLIDES FROM THE CHINA MARKET SEMINAR ON 27 SEPTEMBER 2017 www.icis.com 35
2017: Half Off, Half On
www.icis.com 36
Key words in 2017
Price
War End of
Gasoline
Research/Forecast Export
Poor car car???
Report Quota HSE
sales The rise “storm”
growth of
Strong
excavators Teapots
indicator E10
Private
Excise tax break in Integrate
loophole d Jumbo
on
Realit
blending
y www.icis.com 37
Gasoline market in 2017
10.4 10.4
10.5 10.5 • Weak car sales growth
10.3 10.3 10.3 10.3
10.3
10.1 • Pressure from Sharing economy
9.9
9.8
9.6
• 400-mil registered users
9.6
9.4
9.2
9.6
9.3 • Million tons of gasoline
saving
• Fast growing of public
transportation availability
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
-mil tonnes
2016 2017
www.icis.com 38
Gasoil market in 2017
13.8
13.6
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
2016 2017
www.icis.com 39
Refining capacity additions in 2017
Teapots’ run rates: from 49%( 2016 ) to 62% YTD ( 2017 ) 2017.
www.icis.com 40
Escalated surplus in 2017
41.5
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
2016 2017
www.icis.com 41
Export market and government intervene
Sudden turn
Embarrassing Q2
Restrained rhythm
www.icis.com 42
ICIS China Oil and Refinery Solutions
We provide an end-to-end market data solution for China’s dynamic oil market – crude/petroleum, gasoline/naphtha, gasoil
and so much more
>> ENQUIRE ABOUT THE REPORT >> ENQUIRE ABOUT THE REPORT