1、 ENERGY MARKETS INSIDE: Economic Analysis2 Oil demand4 Price Forecast.13 Contacts.14 ECONOMICS travel registered double digit growth, car sales hit record high, consumer spending experienced explosive growth. Elsewhere, export demand for Chinese goods is recovering on the back of a global economic r
2、ecovery. Though China posted a trade deficit for Mar the first in six years, China ran a trade surplus with US and EU, consistent with strong retail sales, personal consumption expenditures and manufacturing activity in the US in recent months. We believe that this trade deficit is temporary, owing
3、to surges in intermediary goods imports and sustainability of consumer strength. Our ANZ economics expect economic recovery to gain further momentum, with 1Q10 GDP growth to reach 11.6% (YoY), with risk biased to the upside. (Reference: China Economics and Research China is on the Brink of Overheati
4、ng, Mar 2010) China Fixed Asset Investment China Investments 10152025303540Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10FAI, YoYSource: CEIC, ANZ (10)0102030405060Jan-07 Jan-08 Jan-09 Jan-10Foreign, YoYDomestic, Public, YoYDomestic, Private, YoYSource: CEIC, ANZ China Investment Indicators China
5、- Exports 202224262830323436Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10-20020406080100120140160180200YTD FAI, YoYNew lending, 12m/12m (RHS)Source: CEIC, ANZ (80)(60)(40)(20)020406080100Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-103m/3m saarYoYIndicators suggest strong uptrend momentum for Ch
6、ina exports Source: CEIC, ANZ 12 APRIL 2010/ 4 OF 15 OIL DEMAND OIL DEMAND DRIVERS Investment growth has encouraged oil demand growth in both near-term and long-term. Over the past decade, the growths in incomes and the accompanying changes in oil products demand are themselves driven by an ongoing
7、population shift from rural to urban areas. That growing urban population requires new roads and new vehicles, and hence, raising the demand for energy in the transportation sector. Separately, the growth in output in the industrial sector is driving the demand for petrochemical feedstocks, includin
8、g naphtha-based petrochemicals. In the figures below, our analysis shows that the oil demand trend lags GDP by a quarter. Our calculations further reveal that Chinas overall oil implied demand growth only decelerated to 4.7% in 2009, after robust growths of 5.6% in 2008, 7.1% in 2007 and 6.5% in 200
9、6. We also conclude that Chinas apparent oil products demand has doubled and its products composite has shifted since 2001. Naphtha demand, which comprised less than 0.2% of the overall products demand in 2001, has surged to 0.7% in the latest Feb data released. Diesel demand, which took up 49% of C
10、hinas products demand, saw a marginal increase to 51%. Both improved on the back of surging domestic consumption and investment boom. Over the next two years, we forecast Chinas oil demand to grow at 6.2% in 2010 and 9.0% in 2011 while crude throughput is forecasted to grow at a modest annual rate o
11、f 4%. Our analysis is slightly more conservative as compared to IEA, as we see downside risks from greater than expected CNY appreciation, and growing threats of trade protectionism to weigh on exports growth. China Oil Demand and GDP QoQ Growth 024681012141618201Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q
12、09 1Q10-30-20-10010203040Oil Demand, Seasonally-adjusted, QoQ growth, (RHS)GDP, Seasonally-adjusted, QoQ growth (LHS)6-month ma oil demand% %Source: CEIC, IEA, Reuters, ANZ estimates Chinas Overall Oil Demand YoY Growth (900)(600)(300)03006009001,2001,5002002 2003 2004 2005 2006 2007 2008 2009 2010
13、2011(15)(10)(5)05101520253035YoY changeYoY % (RHS)%000 bbls/daySource: CEIC, IEA, Reuters, ANZ estimates 12 APRIL 2010/ 5 OF 15 OIL DEMAND CHINAS IMPLIED DEMAND FOR ALL PRODUCTS Implied demand for oil products, namely naphtha and diesel, has risen over the past two years. We calculate implied demand
14、 of each product by adding the total amount of refinery outputs (data from National Statistical Bureau and CEIC) and the net imports (data from Reuters and CEIC) of the respective product. Chinas oil imports are expected to grow at 5.6% from a year earlier, with the proportion of imported oil consum
15、ed at 48.6%. China imported 198 million tonnes of oil last year while its total production was 272 million tonnes. (1,000)(500)-5001,0001,5002,0002002 2003 2004 2005 2006 2007 2008 2009 2010000 tonnesMonthly Demand, YoY change 12m ma Strong uptrendSource: CEIC, IEA, Reuters, ANZ estimates Naptha Imp
16、lied Demand Gasoline Implied Demand (200)02004006008001,0001,2002002 2003 2004 2005 2006 2007 2008 2009 2010Monthly Demand, YoY 12m ma000 tonnesSource: CEIC, IEA, Reuters, ANZ estimates (800)(600)(400)(200)02004006008001,0001,2002002 2003 2004 2005 2006 2007 2008 2009 2010Monthly Demand, YoY 12m ma0
17、00 tonnesSource: CEIC, IEA, Reuters, ANZ estimates Diesel Implied Demand Fuel Oil Implied Demand (2,000)(1,500)(1,000)(500)05001,0001,5002,0002,5003,0002002 2003 2004 2005 2006 2007 2008 2009 2010Monthly Demand, YoY 12m ma000 tonnesDiesel demand saw a YoY decline due to the financial crisis.Source:
18、CEIC, IEA, Reuters, ANZ estimates (2,000)(1,500)(1,000)(500)05001,0001,5002,0002,5003,0003,5002002 2003 2004 2005 2006 2007 2008 2009 2010Monthly Demand, YoY 12m ma000 tonnesSource: CEIC, IEA, Reuters, ANZ estimates 12 APRIL 2010/ 6 OF 15 OIL DEMAND A SHIFT IN DEMAND TOWARDS LIGHT PETROLEUM PRODUCTS
19、 A decade ago, fuel oil (in particular, heavy fuel oil for steam boilers) was an important part of that demand mix. Since, then, demand growth has come from motor fuels diesel fuel and gasoline and from petrochemical feedstocks, including naphtha and liquefied petroleum gases (LPG). Much of the grow
20、th in oil products consumption is directly related to growth in output of the major sectors of the Chinese economy industrial, transportation, residential and commercial. Activities in the industrial (which includes manufacturing and agriculture) and transportation sectors, account for approximately
21、 75% of all petroleum use in China, and this explains much of the increase in demand for diesel fuel and gasoline. In agriculture, diesel fuel which is used to power tractors and rural vehicles, is highly sought after. The bulk of Chinas electricity comes from coal, hydroelectric power and nuclear p
22、ower. About 25% of Chinas petroleum consumption is for transportation, including moving passengers and freight by road, water, rail and air. The growing demand in the transportation sector reflects the new personal wealth in China. The major fuels for transport are diesel, gasoline, fuel oil (mainly
23、 used in bunkers) and jet fuel. Diesel is by far the most important, accounting for nearly twice as much consumption as gasoline. 2001 Composite of Chinas Oil Products Demand 2010 Composite of Chinas Oil Products Demand Naphtha demandGasoline demandDiesel demandFuel oil demandOthersLPG Demand27%49%1
24、4%2%8%Source: CEIC, IEA, Reuters, ANZ estimates Naphtha demandGasoline demandDiesel demandFuel oil demandOthersLPG Demand51%25%8%7%2%7%Source: CEIC, IEA, Reuters, ANZ estimates 12 APRIL 2010/ 7 OF 15 OIL DEMAND NAPHTHA: Of the main refined fuels, demand for naphtha grew the fastest, up 71% YoY in Fe
25、b, bolstered by investment and consumption growth. Since the government introduced its 4.0 trillion CNY stimulus package in Nov 2008, there had been an investment boom domestically, best demonstrated by the surge in fixed asset investment, which in turn encouraged infrastructure efforts. The transpo
26、rtation sector, which includes railway and highway infrastructure, experienced a robust growth of 50% in Dec 09, while the construction sector saw a similar growth of 46%. Both the utility and manufacturing sectors also recorded strong growths of 28% and 26% respectively. Steel production, an indire
27、ct measure of construction and capital investment, recorded a turnaround in volume last year. Furthermore, the governments accommodative monetary policies have augmented strong consumption spending, driving up demand for consumer goods. Naphtha, a feedstock for petrochemical industry, has inevitably
28、 benefited from this increased demand. Since late 2009, China has started up two 1 million tonne/year steam cracks that have spurred demand for the petrochemical feedstock. A third big cracker is to be operational at Sinopec Corps Zhenhai unit in Eastern China soon. Given that Chinas fiscal stimulus
29、 package is slated to be implemented over a 2-year horizon, namely in 2009 and 2010, we expect that the growth in fixed asset investment is likely to be strong. Even with the implementation of further cooling measures, Chinas investment stimulus is unlikely to fade in the near-term, as much is inves
30、ted in massive, multi-year, infrastructure projects. However, credit tightening will be directionally negative for consumer spending, which may impact the demand for petrochemical and in turn, affect the demand for naphtha. We are forecasting net imports of naphtha to peak in 2011, as domestic produ
31、ction increases. China Fixed Asset Investment (YTD, YoY) China New Projects (YoY) (20)(10)01020304050607080Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09ManufacturingConstructionTransportSource: CEIC, ANZ (40)(20)0204060801001202004 2005 2006 2007 2008 2009New projects6 per. Mov. Avg. (New projects)Sourc
32、e: CEIC, ANZ Naptha - Exports Naptha - Imports (300)(200)(100)0100200300Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10YoY Change 3-month moving average000 tonnesSource: CEIC, Reuters, ANZ (150)(100)(50)050100150200250300350Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10YoY Change 3-month moving average000 tonn
33、esSource: CEIC, Reuters, ANZ 12 APRIL 2010/ 8 OF 15 OIL DEMAND JET-KEROSENE: Recovery in global trade and increasing consumption in China has boosted demand for freight services. China air travel rose 8% ytd, on top of an astonishing 19% growth in 2009. IATA reported that global air travel grew by 6
34、% in Jan 10 following the sharp downturn last year. Income growth rose as a result of the investment stimulus and credit boom. Personal/domestic consumption grew inevitably. China is currently the largest growing travel market in the world, with China travel growth expected to accelerate in 2010, bu
35、oyed by rising consumption demand, growing affluence as a result of income growth, and increased tourist arrivals buoyed by international trade fairs in the Shanghai World Expo and Asian games. Demand for freight services has in turn spurred the demand growth for jet and kerosene, except during the
36、year-end seasonal period. Surge in kerosene occurred during the year-end as more kerosene is produced in place of jet, as the Northeast Asia, namely Japan and South Korea, uses kerosene as heating fuel. Hence, a modest slowdown in construction activity from Chinas infrastructure initiatives may affe
37、ct the demand for global trade and domestic consumption, going forward. China Air Demand (30)(20)(10)0102030405060Jan-08 Jul-08 Jan-09 Jul-09 Jan-10Passenger carried, YoY %Freight carried, YoY %Freight cargo fell due to LNY effects (LNY was in Jan last year)%Source: CEIC, IATA, ANZ China became net
38、export of jet-kerosene in 2009. China recorded heavy imports of jet-kerosene in 2008 during the 2008 Beijing Olympics Games. Jet-Kero - Exports Jet-Kero - Imports (200)(100)0100200300400500Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10YoY Change3-month moving averageDemand for Kerosene from North Asia su
39、rged due to an unusually cold winter.000 tonnesSource: CEIC, Reuters, ANZ (250)(150)(50)50150250350450Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10YoY Change3-month moving average000 tonnesSource: CEIC, Reuters, ANZ 12 APRIL 2010/ 9 OF 15 OIL DEMAND GASOLINE: The key factors pushing the demand for gasol
40、ine include increases in per capita income, urban populations, vehicle sales for domestic consumption and highway construction. In addition, Beijings extension of its policy incentives will boost motor car sales volumes. Chinas vehicle sales saw an increase of 47% YoY, or a total of 14.2 million aut
41、omobile in 2009, according to the National Bureau of Statistics. Chinas completed vehicles exports declined by 60% over the same period. This implies that the strong domestic demand may be snapping up the increased automobile production, which will in turn boost gasoline demand, going forward. Of th
42、e total automobile sales, the China medium- and heavy-duty Classes 4-8 commercial truck and bus markets posted strong sales to over 1 million units in 2009. Recent reports from China Knowledge and Bloomberg stated that Changchun, capital of Jilin Province, has plans to spend around six years to incr
43、ease its vehicle output to 3 million units from 1.2 million units produced last year. Going forward, we expect car sales to normalise to a more rational growth rate of 15% in 2010. Prospects in 2010 for transport fuels, the bulk of Chinas oil demand, appear robust. We forecast gasoline demand to sur
44、ge to 25-30%, driven by the past years of high automobile sales growth. Even if the Chinese government decides to hike interest rates, we believe car sales will continue to be strong, edged on by the growing personal income growth and rapid industrial growth China Automobile Production (YoY) China V
45、ehicles Export (YoY) -40-200204060801001201401602003 2004 2005 2006 2007 2008 2009 2010-30-20-10010203040Automobile Production, YoYGasoline Demand YoY, (RHS)Source: CEIC, ANZ (100)(50)050100150200Jan-08 Jul-08 Jan-09 Jul-09Vehicle Exports (YoY)6-month moving averageSource: CEIC, ANZ China has been a
46、 regular exporter of gasoline, with exports volume averaging 115,000 bbls/day in 2009, compared to 48,000 bbls/day in 2008. Exports of gasoline reached a record high of 270,000 bbls/day in Dec 2009, with most cargos going to Myanmar, North Korea, Vietnam and the Philippines. Heavy imports of gasolin
47、e were recorded in July 2008 to cater to the domestic demand during the Beijing Olympics games. Gasoline - Exports Gasoline - Imports (800)(600)(400)(200)0200400600800Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10YoY Change3-month moving average000 tonnesSource: CEIC, Reuters, ANZ (600)(400)(200)02004006
48、00800Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10YoY Change3-month moving average000 tonnesSource: CEIC, Reuters, ANZ 12 APRIL 2010/ 10 OF 15 OIL DEMAND DISTILLATES: Diesel use has been impacted by a sharp downturn in industrial activity. As seen from the analysis, diesel continued to be dragged by the
49、 aftermath of the credit crisis in the first half of 2009. Furthermore, diesel demand growth tracks the countrys GDP closely. Hence, the diesel consumption may be implied from the recovery of the economy. Chinas GDP and Diesel Demand Growth (15)(10)(5)-51015202001 2002 2003 2004 2005 2006 2007 2008 2009 2010%Diesel sa QoQ growthGDP sa QoQ growthSource: CEIC, IEA, Reuters, ANZ estimates Diesel use impacted by a sharp downturn in industrial activity.
