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TRENDS AND COMPREHENSIVE ANALYSIS
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Up to this year, the entry into WTO brings little changes to
China¡¯s petroleum and petrochemical industries. Before
completely merged into world market system, there is still an
admittance period of 3-5 years for China. Before foreign
corporations massively march into China¡¯s market, both SINOPEC
and CNPC are speeding up to regulate operation strategies,
enhance their own capabilities, and prepare to compete against
the rivals.
Product oil trade analysis after import renewal
In order to straighten the product oil market and crack down
product oil smuggling, China suspends diesel and gasoline import
in September, 1998. According to the WTO promises, China lifts
the prohibition of product oil and implement quota allocation
import in January 2002.
In the bottom of April, State Economic and Trade Commission
releases this year product oil import quota. Although the
prohibition of gasoline and diesel has been lifted, none of
gasoline and diesel is imported until June. Besides the effect
of product oil quota, the late release of import quota is also
the main reason of the product oil import decrease. It is mainly
reflected in the aspect of fuel oil import. Due to the late
release of import quota, import merchants lose the favorable
opportunity of purchasing fuel oil to meet domestic demands this
year.
The total volume of product oil import quota in 2003 and the
application procedure has released in June this year, According
to the WTO promises, the product oil quota of next year is 25.3
million tons, Of which state-run trade companies occupy
20million tons, non-state-run companies 5.3 million tons. State
economic and trade commission didn¡¯t release the detailed
specifics of all types products, such as gasoline, naphtha,
aviation kerosene, diesel, fuel oil and paraffin oil, but
calculated by the increase of 15%, the predicted gasoline and
diesel import volume won¡¯t meet the domestic market demands, if
the imported diesel comes into market, the two biggest
corporations may reduce their effect on prices trends to the
lowest degree.
Downstream (refining and sales) competition tends to be more
fierce
The competition between SINOPEC and CNPC progresses into a new
stage since their competition of buying Guangzhou Zhanjiang
Dongxing refinery in march. This refinery deliberated to deal
with CNPC for several months, but at last SINOPEC bought it with
2.3billion yuan. Before then, in Shenzhen SINOPEC bought a large
oil depot with 1.2 billion yuan about in the same period of last
year. It was said that these two downstream assets was first
sought out by CNPC with intention to buy, but the final result
is that SINOPEC succeeded. It leads to a shock in petroleum
industries. The purchasing accident of Dongxing refinery
forecasts the competition between the two biggest corporations
has move from service stations, oil depots to refineries. The
prohibition of building new refineries is lifted, which gives a
green light to two corporations.
CNPC successfully finds a foothold in south sales market.
CNPC didn¡¯t get Shenzhen oil depot and Dongxing refinery, these
two large-scale downstream industries, and left a defeat record
in relatively prosperous south market. However, it doesn¡¯t mean
that CNPC never succeeds in south market. In fact, CNPC has
obtained not bad achievements in SINOPEC regulated south region.
Two year ago, CNPC didn¡¯t own one service station in south, but
now CNPC¡¯s signboard is ubiquitous in every south city. Till the
beginning of this year, the number of CNPC owned service
stations has arrived at 2,100. By virtue of its East China sales
company and these service stations, CNPC has independently sold
its surplus oil products of northeast region in south market.
The history that CNPC passed its surplus oil to SINOPEC for sale
in south is declared to end.
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