Li Shousheng: Global energy and fertilizer shortages bring opportunities for the industry

June 12, 2024, 9:21 AM

Agricultural Resources Herald

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Guide

Highlights at a glance

In the first half of this year, despite mounting downward pressure on the macroeconomy, China's petrochemical and oil & gas industries achieved solid recovery, with five major central SOEs reaching record highs in operating income and profits. This resilience was driven by strong central macroeconomic controls and proactive industry measures. However, challenges loom in the second half of the year and beyond due to global economic slowdown, potential recessions, high inflation, and rising financial risks. The industry’s key guidance now centers on the principle of "seeking progress while maintaining stability." Efforts will focus on strengthening supply chain resilience, optimizing capital management, and enhancing intrinsic safety. At the same time, the sector aims to advance by seizing global opportunities—particularly in energy and chemical fertilizer shortages, growing domestic demand from automotive, electronics, and infrastructure sectors, and structural adjustments within dual d

In the first half of this year, under the severe situation of intensifying downward pressure on the macro economy, the petrochemical industry and the oil and gas industry still achieved good results in stabilizing and rebounding under the severe situation of the severe downward pressure on the macro economy and the strong control of the central macro policies. The five central SOEs have all achieved unexpected operating results, and both main business income and realized profits have created new levels.

But we are also fully aware of the severity and uncertainty of the macroeconomic situation in the second half of this year and next year. Against the backdrop of a continued global economic downturn and a possible recession, and in the context of high global inflation and intensified financial risks, China's economy and the development of its petroleum and chemical industries are all facing enormous challenges.

In the second half of the year, a firm guiding ideology for the economic operation of the entire industry is to comprehensively, earnestly and creatively implement the central policy of "seeking progress while maintaining stability". Consolidate the "stable" foundation. Focus on the three key tasks of building resilience of the supply chain, efficient management of the capital chain and improving the level of intrinsic safety; the second is to make every effort to enhance the advantage of "advancing". Focus on grasping the major opportunities arising from the shortage of energy and chemical fertilizers in the world; focusing on grasping the major opportunities for the demand for supporting chemical products such as automobiles, electronics, and infrastructure supported by the domestic macroeconomic; Focus on grasping the major opportunities for major restructuring and adjustment of the industrial structure in the international and domestic "dual circulation", and make every effort to promote the "advancement".

Among the opportunities of global energy and fertilizer shortages, this winter and next spring are a major opportunity period. This winter, Europe will usher in the coldest winter, and the global fertilizer market will be in a tight situation of "high price and shortage of goods". my country is precisely a country with advantages in oil refining capacity and chemical fertilizer (mainly nitrogen fertilizer and phosphate fertilizer) capacity. Can we seize this opportunity, make some policy adjustments, do some good deeds, and do some “support others and develop ourselves” We think it has great potential and can make a lot of difference. To do these things well, we need to rely on our wisdom, experience and vision.

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