Colossal drop in product prices by 60% this year triggered by deteriorating demand has caused China's largest ethylene producer Sinopec Shanghai Petrochemical Co Ltd to expect a major loss in 2008.
The company posted a net loss of 2.32 bln yuan (US$339 mln) in the third quarter, from a loss of 94.07 mln yuan recorded a year ago. Q4 losses are expected to surpass Q3 losses. Additionally, refining subsidies received from the Government thus far, will also be discontinued from Q4. The high-priced crude oil purchased in Q3 will be reflected in its Q4 report, although the company has made an adjustment on its production plan, including suspension or reduction at some of its plants in phases. The positive impact of the recent sharp fall of crude will not be seen for another two months when the effect percolates from processing orders and crude delivery.