The long-standing contradiction between supply and demand for toluene is difficult to resolve by export

Judging from the recent situation, the market has a relatively large systemic risk.
The problems from the economic contraction level are particularly acute and prominent.
As domestic environmental protection requirements have become more stringent, this has led to obvious signs of shrinking on the demand level.
Months later, the overall destocking process in the market is still not obvious enough.
For this reason, we try to analyze the crux of the problem from the international flow of resources
.
From the perspective of internal and external arbitrage
.
According to past experience, the arbitrage window for internal and external disks is usually based on the forward link, that is to say, in theory, the domestic price level is usually higher than that of the external disk
.
We can find that since 2016, the internal and external trading has only appeared in the fourth quarter of 2016 and the first half of April.
However, only the fourth quarter of 2016 is really eligible for arbitrage, taking into account the special domestic market at that time In reality, the internal and external markets basically do not have the conditions for arbitrage
.
At the same time, although the window of reverse arbitrage for internal and external disks basically maintains the long-term open conditions, on the one hand, the technical conditions for domestic toluene arbitrage are still not mature enough.
On the other hand, the problem of tight domestic medium-line funds has caused domestic financing needs.
Larger, this is also the key to the fact that despite the domestic oversupply, there is still a constant import of about 700,000 tons per year
.
From the perspective of the Asian American arbitrage window
.
Based on experience, Asian-American arbitrage activities are relatively inactive.
Generally, there will be reverse arbitrage activities from the United States around the end of the year
.
We can find that the U.
S.
-Asia spread has always fluctuated within the positive and negative arbitrage range between Asia and the United States.
Taking into account China's domestic financing needs, under the assessment of time risk and exchange rate risk, the arbitrage enthusiasm of Asian resources for the United States is obviously not high
.
In summary, the current long-standing supply and demand contradiction in the domestic toluene market can hardly be resolved by export.
Following the monetary easing activities in 2009, a large amount of hot money was forced to re-enter the financial sector due to lack of investment channels, and the problem of financial leverage is increasing.
Obviously, this will eventually lead to the overall tightness of the domestic economy after 2014.
Therefore, on the one hand, the domestic market mechanism needs to be continuously improved, on the other hand, actively promote the de-capacity and de-stocking of the supply side, in order to truly achieve continuous improvement.
Own supply and demand structure and tend to be healthy development
.