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Why should Chinese chemical companies fall into collective anxiety after an avalanche of international oil prices?

Zhangjiagang Sansu Machine Co.,Ltd | Updated: Dec 18, 2018

The petrochemical industry and its downstream enterprises in jiang, zhejiang, anhui and other regions are experiencing the test brought by the decline of oil price.

International crude prices, which are closely linked to petrochemical and downstream industries, have fallen more than 30 per cent in the past two months. U.S. crude oil futures fell more than 8 percent on Nov. 13, the longest losing streak in 12 sessions.

Crude oil continued deep fall triggered a petrochemical industry chain and the downstream manufacturing chain reaction of some petrochemical products a price drop down again, has low cost line, some industry and even had to stop production to relieve weakness - the past a month of time, the focus of China's chemical fiber enterprises, northern zhejiang and southern jiangsu area of chemical fiber factory production equipment maintenance news.

If cost is just the change probably does not have the biggest trouble, more important is influenced by a variety of economic environment, industry environment, the downstream petrochemical enterprises, such as textile, plastic processing enterprises - did not have the raw material prices decline to stimulate demand and rising, the traditional peak season also show signs of apathy, which makes the current petrochemical industry increasingly difficult.

Fortunately, a turnaround is afoot.

Two weeks ago, at the G20 summit in Argentina on December 1st, there was some good news: oil producers were about to implement production cuts, and trade disputes between China and America would be temporarily eased along with an agreement. This is expected to help boost oil prices and related chemicals; In addition, the trade environment between China and the United States is also showing some potential for change.