We believe cement shipments are a great leading indicator for a pick-...
2019-09-26 9 ENGLISH REPORTS
UBS Evidence Lab's satellite image tracker indicates that apart from Hengli's project, which shows faster-than-anticipated progress, the other projects are moving slowly, with ZPC Phase I refining and chemical units still unfinished and the start-up of the PetroChina and Sinopec projects likely to be delayed to after 2021. We think other refineries will find it difficult to replicate HPIP's progress, and hence the launch of new capacity after Hengli could be slower than the market expects. EVIDENCE UBS Evidence Lab gauged the construction progress of four refiners through satellite data. As of the monitoring date: HPIP: The refining project was further ahead of expectations. Refining and chemical facilities were largely finished, but with the ethylene and PTA units still under construction. ZPC: Phase I refining and chemical units remained uncompleted (some still under construction) and progress overall lagged expectations.
An H219 launch was originally targeted but we think this could be delayed to H220. Zhongke: Work on the refining and chemical project had begun with the construction of some storage tanks, but the main refinery and chemical facilities remained uncompleted. We expect start-up in 2021-22. Jieyang: Little progress to date. We expect start-up to be delayed to after 2022. WHAT'S PRICED IN? HPIP's better-than-expected progress has set records in China and greatly accelerated regional expectations for the launch of the country's refining projects. We differ from the market, believing other refineries will be hardpressed to replicate HPIP's progress, causing capacity in China to come on stream slower than the market expects. A/H refiner stocks have generally sold off 5-46% TTM (except Hengli), and we think the bearish view on fundamentals is priced in. Next wave of China refiner launches could be slower than expected China has kicked off a new cycle of refinery capacity launches entering 2019. Mega projects such as HPIP and ZPC have already made some progress in construction or are even near starting up. Construction of Sinopec and PetroChina's new refineries are also moving ahead. This intensifies the existing oversupply of refinery capacity in China with profound implications for APAC refining and chemical fundamentals. Against this backdrop, UBS Evidence Lab turned to satellite imagery to better gauge the progress of four under-construction mega refineries: HPIP, ZPC, Sinopec's Zhongke Refinery and PetroChina's Jieyang Refinery.
UBS Evidence Lab Remote Sensing practice is a suite of products that deals primarily with satellite imagery but also includes aerial survey, unmanned aerial imagery, and land-based monitoring sensors such as pollution measurement or weather station measurement. For these observations, UBS Evidence Lab also uses cutting-edge image recognition and data processing techniques to arrive at preliminary snapshots of where the refineries are in their construction. Satellite tracking suggests the four refiners have made differing levels of progress: 1) HPIP: Progress in refining facilities is further along than expected; the ethylene and PTA projects are still under construction. 2) ZPC: Phase I refining and chemical units remain uncompleted (some remain under construction) and progress overall lags expectations. An H219 launch was originally targeted but we think this could be delayed to H220. 3) Zhongke Refinery: The ground has been broken and we expect it to come on line in 2021-22. 4) Jieyang Refinery: Little progress to date and we expect it to come on stream after 2022.
标签： ENGLISH REPORTS