China's petrochemicals import to rise in long run
Monday, 4 January 2010
BEIJING, Jan 03 (Commodity Online): China may become dependent on petrochemicals import in the long run as it plans short term measures to curb over-capacity, according to a new analysis by Business Monitor International (BMI).
In first half of 2009, ethylene output was down 6.8 per cent year-on-year (y-o-y) to 4.8mn tonnes, while plastic in primary forms was down 0.1 per cent to 16.5mn tonnes and the manufacturing of plastic products was up 4.9 per cent to 20.2mn tonnes. While the results were poor by historical standards, second quarter saw some signs of recovery as a result of the government's economic stimulus efforts, BMI report said.
In June, the fall in ethylene output had moderated to 2.8 per cent and plastics output was up 3.2 per cent. Inventories had largely been cleared along the supply chain and demand was showing signs of revival with BMI anticipating an increase in H209.
By end-2009, BMI estimates that petrochemicals output grew by 0.5 per cent. However, exports are unlikely to recover until H210, while domestic demand growth is making a gradual but slow recovery. Domestic end-user demand for chemicals has been hit hard by the fall in exports, with external demand for textiles, garments and toys falling sharply.
China Petrochemical and Chemical Corporation (Sinopec)'s petrochemicals production saw petrochemical production decline in the first nine months of 2009, with ethylene output down 2.25 per cent y-oy to 4.74mn tonnes, synthetic resins up 1.05 per cent to 7.41mn tonnes and synthetic fibre monomer and polymer up 0.65 per cent to 5.73mn tonnes (including output from BASF-YPC and joint ventures (JVs) between Shanghai Secco and BASF and BP). Output appeared to rally in Q309, assisted by the opening of new petrochemicals units. BMI cautions that while the global economy is in a phase of slowdown, Chinese expansions over the next two years could create a surplus of supply, if not in China then in the international market. We estimate there was a 2.15mn tpa increase in PE capacity and a 2.25mn tpa increase in PP in 2009. With BMI anticipating domestic demand growth of 2 per cent, polymer market self-sufficiency should approach 75 per cent PE and exceed 100 per cent PP in 2010. Overexpansion of PVC production in China in recent years has led to a market imbalance.
In first half of 2009, ethylene output was down 6.8 per cent year-on-year (y-o-y) to 4.8mn tonnes, while plastic in primary forms was down 0.1 per cent to 16.5mn tonnes and the manufacturing of plastic products was up 4.9 per cent to 20.2mn tonnes. While the results were poor by historical standards, second quarter saw some signs of recovery as a result of the government's economic stimulus efforts, BMI report said.
In June, the fall in ethylene output had moderated to 2.8 per cent and plastics output was up 3.2 per cent. Inventories had largely been cleared along the supply chain and demand was showing signs of revival with BMI anticipating an increase in H209.
By end-2009, BMI estimates that petrochemicals output grew by 0.5 per cent. However, exports are unlikely to recover until H210, while domestic demand growth is making a gradual but slow recovery. Domestic end-user demand for chemicals has been hit hard by the fall in exports, with external demand for textiles, garments and toys falling sharply.
China Petrochemical and Chemical Corporation (Sinopec)'s petrochemicals production saw petrochemical production decline in the first nine months of 2009, with ethylene output down 2.25 per cent y-oy to 4.74mn tonnes, synthetic resins up 1.05 per cent to 7.41mn tonnes and synthetic fibre monomer and polymer up 0.65 per cent to 5.73mn tonnes (including output from BASF-YPC and joint ventures (JVs) between Shanghai Secco and BASF and BP). Output appeared to rally in Q309, assisted by the opening of new petrochemicals units. BMI cautions that while the global economy is in a phase of slowdown, Chinese expansions over the next two years could create a surplus of supply, if not in China then in the international market. We estimate there was a 2.15mn tpa increase in PE capacity and a 2.25mn tpa increase in PP in 2009. With BMI anticipating domestic demand growth of 2 per cent, polymer market self-sufficiency should approach 75 per cent PE and exceed 100 per cent PP in 2010. Overexpansion of PVC production in China in recent years has led to a market imbalance.