Petrochemical industry in Taiwan may see 7.6% rise in Q4.12

22-Nov-12

The output value of Taiwan’s petrochemical sector is expected to rise about 7.6% in Q4-2012 vs Q3-2012 on expectations that stimulus measures by major economies will boost demand, as per Taipeitimes.com. However. the output value of the sector for 2012 is expected to fall 4.7% from 2011 because of the uncertainty over the global economy this year, the Industry and Technology Intelligence Services (ITIS) report said, estimating output of the local petrochemical sector in Q4 at NT$462.2 bln (US$15.83 bln), up from NT$429.5 bln a year earlier. However, for the year as a whole, the production value of the sector will likely fall to NT$1.83 trillion, from NT$1.92 trillion last year. Estimate of higher output in Q4 largely reflected optimism over the stimulus packages put in place recently by major economies, such as China’s move to pump funds into the market, and the US Federal Reserve’s third round of quantitative easing. A further factor is the stabilizing of international crude oil prices in the fourth quarter, generating higher margins for petrochemical manufacturers and encouraging them to raise shipments. CPC Corp, Taiwan’s (CPC) residue fluidized catalytic cracking plant has started boosting the state-owned oil supplier’s production of propylene, which should also help raise total petrochemical output in the current quarter. However, the institute said that the local petrochemical industry felt the pinch from concerns over the eurozone’s debt problems earlier in the year and also faced rising competition from emerging economies that were ramping up production capacity. As a result, the research institute expects petrochemical output for the whole year to trend lower from a year earlier. It also cautioned that negative factors are still in place, but are offset for the time being by stimulus measures. In the third quarter, the output of the petrochemical sector fell 4.1% from Q2 to NT$429.5 bln on limited suspension of production by CPC and the Formosa Plastics Group due to annual maintenance. In the July-September period, the output of the petrochemical raw material segment fell 8.6% from a quarter earlier to NT$264.6 bln, while the production value of the artificial resin and plastics segment rose 4.5% to NT$151.8 bln. During the same period, output of the artificial rubber segment fell 12.2% from the second quarter to NT$13 bln.