China’s strong petrochemical growth to continue till end of year, likely to slow next year

30-Nov-09

The strong growth of China’s petrochemical sector will extend to the end of this year, but is likely slow and remain at reasonable levels next year triggered by the possible tightening of monetary policy and an end to government incentive measures as the Chinese economy recovers. China's petrochemical imports should post a "reasonable" growth next year, more subdued than what it has been so far this year, on the possible wearing down of the effects of the government's fiscal stimulus package as per ICIS. As Asia’s leading importer of petrochemicals, demand from China has been instrumental in the recovery of product prices this year following severe weakness in 2008. The strong growth in volumes of imported polyolefins, phenol and acetone, particularly robust till Q4-2010, has been a reflection of the low base in 2008 at the height of the global economic and financial turmoil. Petrochemical product prices in Asia have remained below pre-crisis levels despite some recovery this year and the low prices may have also spurred the strong demand from China that is shifting its economic growth from investments and exports towards domestic consumption.