Stability on surface a mirage - Petrochemical trade body

06 Aug '09

2 min read

An analysis by the China Petrochemical Association points out that the main reasons for the entire industry still facing the crisis are; current capacity utilization is insufficient; overall market demand for petrochemical is still weak; export situation is grim and most petrochemical products are greatly impacted by imports.

The agency's statistics show that output value of the entire industry reached 2.9 trillion Yuan in the first half, down 10.6 percent year-on-year, narrowing 0.6 percentage points from January to May and output value of national oil and gas exploration industry realized 305.02 billion Yuan, down 41.3 percent year-on-year.

It is worth noting that the National Development and Reform Commission (NDRC) accelerated steps for price adjustments of oil products in the first half, due to which benefits of enterprises have improved.

In the first five months of this year, refining industry turned from a loss-making industry into a profit-making sector, as the industry suffered losses of 56.831 billion Yuan in the same time last year and earned profits of 45.391 billion Yuan this year.

In the first 5 months of this year, the industry realized a total profit of 156.673 billion Yuan, down 30.93 percent year-on-year. However, in the first half, apparent domestic consumption of oil still fell about 3 percent year-on-year.

Of this, crude oil fell by 1 percent, finished oil products dropped 2.6 percent; ethylene consumption fell 3.2 percent; paint fell 8.2 recent and domestic petrochemical market lacked demand and prices still hovered at low levels.

Under-Secretary-General of Petrochemical Association Feng Shi Liang predicts that the industry will continue to develop in a positive direction in the second half and has termed the current surface stability as a mirage.

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