评估中国 “反内卷” 的潜在影响-Assessing potential impact from China‘s Anti-Involution

Summary of Conference Call Notes Industry Overview - Industry: APAC Energy & Chemicals - Focus: Impact of China's regulatory changes on refining and petrochemical sectors Key Points 1. Assessment of Old Facilities: Several Chinese provinces have initiated assessments of old refining and petrochemical facilities, defined as those over 20 years old or at the end of their design service life. Regulators will decide on relocation, renovation, or closure based on these assessments [1][2][3] 2. Potential Capacity Closure: The potential closure of Chinese refining capacity is viewed positively for non-China refiners, as it may reduce the risk of increased oil product exports from China. Companies highlighted include Reliance Industries, HPCL, and BPCL, which are rated as "Buy" [2][3] 3. Current Capacity Statistics: Approximately 30% of China's current crude distillation unit (CDU) capacity consists of old facilities. State-owned enterprises (SOEs) dominate this segment, typically exhibiting higher energy efficiency due to ongoing capacity upgrades [3][10] 4. Chemical Sector Outlook: Despite potential closures in the Chinese chemical sector, the existing surplus is expected to persist. Companies such as Lotte Chem, PTTGC, PCHEM, and Hanwha Solutions maintain "Sell" ratings due to this ongoing surplus [2][12] 5. Chemical Capacity Data: Old facilities account for 9-13% of mainland China's capacity in key chemical products like ethylene. However, closures would only address about 7% of the global surplus in ethylene, indicating insufficient impact on global supply-demand balance [12][15][16] Additional Insights - Energy Efficiency Considerations: The assessment of old facilities includes energy efficiency metrics, which are generally higher for SOEs compared to private entities [3][10] - Market Implications: The anticipated closures could lead to a tighter market for non-China refiners, potentially increasing their margins and market share [2][3] - Regulatory Challenges: The implementation of closures may face challenges without significant fiscal support and changes in local government incentives [2] Conclusion The regulatory changes in China regarding old refining and petrochemical facilities could have significant implications for both local and international markets. While the potential closure of capacity is seen as beneficial for non-China refiners, the chemical sector may continue to struggle with surplus issues.