China’s imports of most petrochemical products continued to decline in June 2011 on restricted domestic demand, partly due to limited access to credits amid continued monetary tightening by the government, as per ICIS. Spikes in international prices have also led some Chinese buyers to hold back purchases during the month. An ongoing power shortage may have contributed to weakness in demand for petrochemicals. Power consumption usually peaks during the summer months of June to September.
In June, the country’s propylene imports fell by a quarter to 97,336 ton, while it took in 30% less butadiene (BD) compared with levels in the same period last year, official data from China Customs showed. Prices of the olefin product surged by over US$300/ton in just two months from mid-May. Meanwhile, China halved its benzene imports to 6,100 tons, according to the China Customs.
China’s central bank has, in 2011, raised its key interest rates three times and hiked banks’ reserve requirement ratio six times. The reserve requirement refers to a part of deposit that must be parked with the People’s Bank of China, effectively restricting the amount of banks’ loanable funds.