Profits at Qilu Refinery, huge losses at Jinzhou Petrochemical

19-Jul-05

Qilu Petrochemical, a unit of China Petroleum & Chemical Corp's (Sinopec Corp.) ethylene output reached 408,100 metric tons in H1-2005, at its its 720,000 tpa cracker. Based on this output, Qilu looks poised to reach its target of producing 800,000 tons of ethylene for the whole year. The company recorded net profit of CNY1.248 billion in this period, reaching 67% of its target profit for the year. The surging crude oil prices, however seem to have had a negative impact for Shenzhen-listed Jinzhou Petrochemical Co. Ltd., which has forecast a loss up to 600 million yuan (US$72.4 million) for H1-2005. This figure is 10 times higher than the 60 million yuan loss predicted by the company for H1-2005, earlier in April. This indicates a surge in crude oil price during the past two months, which have sharply weakened its profitability. Jinzhou's main businesses cover production and sale of oil products including gasoline and diesel, petrochemicals and organic chemicals. The company netted profits of 146 million yuan in the first half of 2004 and 267 million yuan in the whole of 2004. The poor performance of Jinzhou Petrochemical may also mirror the situation of many other oil refineries in the country. Quite a few Chinese oil refineries have posted profit slide or even loss in the first half of this year.