Many industries are facing high oil price pressure, and the profits of listed companies such as petrochemical logistics have been squeezed

Despite the decline in international oil prices on June 23, the price of light crude oil futures for August delivery on the New York Mercantile Exchange and the price of London Brent crude oil futures remained above $100/barrel
as of the close of the day.

Since the beginning of this year, international oil prices have continued to be at a high level, and the pressure of high oil prices on the downstream industry is gradually emerging, and many industries such as petrochemicals, transportation, and logistics have faced high oil prices, the cost has increased significantly, and the impact has also been greater
.

"The drag of high oil prices on manufacturing output, capacity utilization and profits is obvious, and the severity depends on the intensity of crude oil consumption and price transmission capacity of the industry
.
" Song Xuetao, chief macro officer of TF Securities, told reporters, "We calculated the complete consumption coefficient of oil and gas in various industries through the input-output table, and found that the rise in oil prices had the greatest
impact on the cost of raw material manufacturing.
" In addition, the consumer goods manufacturing industry is more affected by oil prices are chemical fiber products, and the equipment manufacturing industry is more affected by oil prices are batteries
.
”

The profits of companies such as petrochemical logistics have been squeezed

"The rise in oil prices affects all aspects of the industrial chain, not only transportation and logistics, but also products based on crude oil such as chemicals
.
" Zhang Yi, CEO of iMedia Consulting, also said
in an interview with reporters.

Under high oil prices, the impact on petrochemical listed companies is self-evident
.
Sinopec said on the investor interactive platform that if the price of crude oil exceeds $130 per barrel, the refining business will be greatly challenged
.
At the same time, under high oil prices, the chemical business is facing upward cost pressure
in the short term.

Hengli Petrochemical introduced that since the company's subsidiaries are mainly engaged in crude oil processing and petroleum products production and sales, PTA, chemicals (including but not limited to styrene, ethylene glycol, polypropylene) and other production and sales business, its prices are greatly affected by international and domestic prices
.

Wanhua Chemical said in the first quarterly report that affected by the sharp rise in global crude oil, natural gas and other basic energy prices, the company's main chemical raw materials and European companies' energy costs rose sharply year-on-year, causing the company's net profit to fall
sharply.

In addition to petrochemical-related companies, transportation, logistics and other companies have also significantly increased costs
due to the rise in oil prices.

In response to investors' questions, COSCO SHIPPING Holdings said that the proportion of fuel costs will change
with market oil price fluctuations.
In 2021, the voyage cost of the company's container business totaled 32.
5 billion yuan, accounting for 16.
88%
of the total container shipping business cost.

Road freight company Transfar Zhilian also mentioned that the continuous rise in oil prices will directly lead to an increase in the transportation costs of enterprises, and in the context of rising oil prices, it will gradually try to solve their logistics needs through the platform model, thereby reducing logistics costs
.

"The pressure of high oil prices is particularly felt in the raw material production and low-end consumer goods manufacturing industries
.
" Zhang Yonghao, an analyst at Zhongyu Information, told reporters that the greater the intensity of oil and gas demand and the worse the price transmission ability to the downstream
, the greater the squeeze on industrial profits.
For example, some industries need large-scale oil and gas resources as raw materials or as direct power energy for product circulation, direct production or circulation costs climb and price pressure is difficult to pass on, profit margins will be squeezed
.

Efforts need to be made to resolve high cost pressures

Zhang Yonghao believes that "from the actual supply and demand point of view, the situation of high oil prices is supported, and the structural supply shortage caused by long-term insufficient investment is difficult to alleviate; Although the current risk of economic stagflation and the prospect of "OPEC+" production increase have put pressure on crude oil prices to continue to grow, it can still be judged that crude oil futures prices will be above
$100 per barrel in the third quarter or even longer.
”

This means that many industries such as petrochemicals and transportation will continue to face high oil price pressure, and the priority of relevant enterprises is to try their best to resolve high cost pressure
.

Hengli Petrochemical said that in order to avoid the adverse impact of large fluctuations in crude oil and product prices on the company's operation, it intends to carry out hedging business, make full use of the function of the futures market, effectively manage the risk of large price fluctuations, improve the level of enterprise operation, and ensure the healthy and continuous operation
of enterprises.
According to the production and operation plan, in line with the principle of prudence, it is expected that the margin required for futures hedging in 2022 will not exceed 4.
571 billion yuan (other currencies are converted into RMB according to the current exchange rate).

In addition, in the face of high costs, downstream transmission is a common means
of many industrial chains.

A relevant person from the board secretary office of Rongsheng Petrochemical told reporters that the rise in crude oil prices will lead to higher prices of downstream products, but if the price cannot be transmitted, profits will be affected
.
The price of some of the company's products has increased
.
In addition, some of the company's products have also been hedged
.

Song Xuetao believes that whether the cost pressure of rising oil prices can be transmitted determines the profits and pressure capacity
of enterprises.

Zhang Yi believes that in the long run, it is still necessary to prepare for risks, that is, technological innovation alternatives and improving production efficiency, only these can truly hedge the impact
of oil price fluctuations.