The recovery in China's petrochemical industry slowed last month due to weak demand as per China Petroleum and Chemical Industry Association (CPCIA)’s monthly report. The oil and gas exploration and oil refining sectors have seen solid recovery in July, but the rebound in the chemical industry has slowed down. In July, the total revenue of the petrochemical industry stood at 571.4 bln yuan, down 3.7% from June - the first month-on-month drop in the industry this year.
As per ICIS, analysts said along with the country's stimulus package for the petrochemical industry, companies in the industry would see better performance in the second half. China will speed up construction of large-scale oil refining and ethylene projects as part of its economic stimulus package announced in February. Oil refining bases will be built in the Pearl River Delta, Yangtze River Delta and Bohai Sea-rim economic zone, with a minimum refining capacity of 20 million tons each. This will be accompanied by an equal number of ethylene projects with annual production capacities of 2 million tons each.