With the increase in supply, the cost of lubricating oil factories is expected to be further reduced; base oil imports have fallen sharply year-on-year, and exports have increased substantially.

April base oil market analysis

　　In the middle and late April, after the news that three new production capacity units started to work one after another was released, the market price fell, and downstream users were obviously bearish about the market outlook. With the reduction of oil refining costs in May, the base oil market price is expected to follow a further sink. In addition, due to the impact of the new production released in May, the market supply and demand contradictions have intensified. It is expected that there will still be 200-300 in the base oil market in May. RMB/tonne downside.

　　According to market data, the total output of the base oil market in April was 726,450 tons, an increase of 18% from the previous month. In April, the total output of paraffinic base oil was 310,500 tons, the naphthenic base oil was 133,600 tons, and the second-class base oil accounted for 83% of the total output. The operating rate in April was 45.4%, an increase of 8.87% from the previous month.

　　 Lubricant Market Analysis

　　 Downstream lubricating oil factories used a lot of high-viscosity base oils in April, so the demand for high-viscosity purchases increased significantly faster than low-viscosity base oils. The 350N and 500N-based high-viscosity base oils increased seasonally.

After the outbreak of the domestic lubricant market, demand gradually recovered. The demand for automotive lubricants and industrial lubricants increased significantly in April. The inventory of large and medium-sized lubricants factories has gradually been digested and entered the replenishment cycle, which led to the emergence of base oil market prices in April. Significant increase, with a cumulative increase of about 300-400 yuan/ton.

　　In April, the lubricating oil plant was fully resumed, and the oil consumption reached 94,170 tons, an increase of 18.53% compared with March. Among them, 81 companies completed the purchase, with a total purchase of 9255 tons. The largest purchase volume is mainly in East China and North China, accounting for 51.43% and 28.96% respectively.

　　Inventory of the enterprise: After the full-scale resumption of production, the oil consumption of the factory increased. In early April, the enterprise's inventory gradually consumed from the high level to the low level, accounting for 26.45% of the inventory. Starting from the third week, due to the increase in end-user orders, the shipment was positive, and the factory began to restock the raw materials. As of the end of April, the proportion of factory inventory increased by 47.92%. Lubricant factories' enthusiasm for picking up goods increased significantly compared with March, but sanitation events still inhibited economic activity. Small and medium-sized lubricating oil factories purchase raw materials based on terminal demand and sales volume. The oil recovery cycle has been extended from previous years, and some large factories have resumed their original procurement cycles. , Stable procurement on a weekly or monthly basis.

　　 Base oil imports fell sharply year-on-year, and exports increased significantly

According to customs data, the import volume in March 2020 was 173,300 tons, a year-on-year drop of 109,000 tons, which was 38.69%. Under the dual impact of the epidemic and the price war in March, the price of crude oil at the end of March was significantly lower than that at the end of February. It fell to about US$20/barrel, and the base oil market also suffered heavy losses. Domestic resources have cut prices, import resources have plummeted, coupled with poor domestic demand affected by the epidemic, less resources in Hong Kong, and imports fell to 170,000 Tons. The cumulative imports from January to March were 625,700 tons, down from the same period last year, mainly due to the weakened demand affected by the epidemic and the significant decrease in imported resources to Hong Kong. In terms of export volume, due to the increase in the operating load of some domestic refineries in March, the output has increased compared with February. The export volume has increased significantly, mainly due to the surge in exports to South Korea.

　　In March 2020, most of the top ten regions in terms of import volume were in East China, North China, and South China, and less inflows in Northeast and Central China. From the perspective of single provinces and cities, the top three are Jiangsu Province, Tianjin City, and Zhejiang Province, with imports of 43,200 tons, 39,500 tons, and 22,800 tons, respectively. The three provinces and cities have the convenience of ports, bringing together many foreign-invested factories, Sino-foreign joint ventures, private lubricants companies and import traders. They are the main areas where base oil consumption is concentrated, so import resources have flowed in more.

In April, the base oil was only affected by the push of crude oil and the demand for high-viscosity oil in the middle of the year. The price pushed up, and the low-viscosity oil went up. However, the WTI May crude oil futures price on April 20 fell to a negative value, and then the price Low-level operation suppresses the confidence of the operators in the industry. In the second half of the year, base oil prices started to fall, market shipments slowed down, and import prices continued to fall. Especially, the import prices of Thailand 150BS and Formosa Plastics 150N continued to decline, and the end of April was significantly higher than the end of March. It fell by 500-700 yuan/ton. It is difficult to see obvious improvement in downstream demand, and the supply of domestic resources is ample. It is expected that the import volume of base oil will decline in April.