Core Viewpoint - China Petroleum & Chemical Corporation (Sinopec) anticipates a significant decline in net profit for the first half of 2025, projecting a profit of 20.1 billion to 21.6 billion yuan, down 39.5% to 43.7% from 35.703 billion yuan in the same period last year, primarily due to falling international oil prices and intense market competition [2][3]. Group 1: Reasons for Profit Decline - The first reason for the profit decline is the significant adjustment in international oil prices, which fluctuated between over $80 and below $60 per barrel in the first half of 2025. The average Brent crude price was $70.81 per barrel, down 15.11% year-on-year, while WTI crude averaged $67.52 per barrel, down 14.33%. This price drop has adversely affected upstream exploration and development revenues [5]. - The second reason is intensified competition in the refining sector, where domestic fuel demand has peaked, leading to a 3.4% year-on-year decline in refined oil sales to 87.05 million tons. The industry faces a dual challenge of declining prices and increasing competition, exacerbated by overcapacity and low-quality competition [6]. - The third reason is the weak recovery in the chemical sector, which has been in a downturn for about three years. The profit-to-revenue ratio for chemical raw materials and products was only 4.10%, the lowest since 2017. The chemical product price index has dropped by 6.4% since the beginning of 2025, indicating ongoing pressure on profitability [7]. Group 2: Industry Trends and Policies - Despite the overall losses in the chemical industry, there is still a strong push for capacity expansion. From 2019 to 2024, organic silicon capacity increased by 140%, and further expansions are planned, which could lead to a 150% increase in capacity by 2030 [9]. - The government has initiated policies to combat excessive competition and overcapacity in the chemical sector. Measures include the introduction of guidelines to eliminate local protectionism and promote the exit of inefficient production capacities, which are expected to catalyze a recovery in the chemical sector by the third quarter of 2025 [10].
中国石化预计净利润同比下降超40%!