Chinese petrochemicals sector sees slightly more robust growth, particularly in olefins

23-Aug-13

The Chinese petrochemicals sector is seeing slightly more robust growth, particularly in olefins, but this is insufficient to absorb ongoing increases in capacities. Combined with feedstock cost rises, this will cause a narrowing of margins. As per Business Monitor Index, coal-to-methanol production should ease the situation over the medium term and reduce net imports in some segments. The total value of petrochemical production in China grew 11.6% y-o-y to CNY1.72 trn during the first two months of the year with the value of imports rising 24.1% to US$19.6 bln and exports growing 5% to US $13.8 bln. In the first four months of the year, ethylene output rose by 3.3% y-o-y to 5.3 mln tons while primary plastics output grew 9.6% to 18.27 mln tons and plastic products output rose by 2.2% to 18.96 mln tons. Growth in ethylene output came after a dismal performance in 2012, when production fell by just over 2% to under 15 mln tons, in spite of 20% growth in cracker capacity to 21.56 mln tons.