BTXS Industrial Chain Gross Profit Analysis
During the 13th Five Year Plan period, the profit distribution of aromatics and downstream products in the industrial chain showed distinct characteristics, that is, the overall profit of the industrial chain expanded and transferred to the downstream. In 2021, the first year of the 14th five year plan, the profit distribution of the industrial chain has changed significantly again. As a connecting item in the industrial chain, styrene is suffering from the joint attack of upstream and downstream.
During the 13th Five Year Plan period, the overall profit of the industrial chain expanded, which meant the cumulative gross profit margin of various items in the industrial chain expanded. In 2016, the cumulative gross profit margin of the five items was only 26.88%, and by 2020, the cumulative gross profit margin had increased to 76.54%.
Over the same period, the profits of the industrial chain were obviously transferred to the downstream. Comparing the two time nodes, the cumulative gross profit of ABS, PS and EPS in 2016 was 8.85%. By 2020, the cumulative gross profit margin of the three major products reached 69.74%.
There are two main reasons for the profit expansion and transfer of the industrial chain. On the one hand, the phased low price of crude oil provides a low-cost environment for all products of the industrial chain. On the other hand, it is more obvious in the downstream that the demand growth rate is greater than supply growth rate compared with that in the upstream, so a better supply-demand pattern supports the downward transfer of profits in the industrial chain.
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