High crude costs and low petrochemical prices have put a dent in the earnings of Sinopec Shanghai Petrochemical Co. China's largest ethylene producer by capacity, expects to post a net loss for the three months ended March 2006. China began reforming its pricing system for oil products April 1, linking them to production costs. On the other hand, the country kept the domestic selling price of petrochemical products low to shield its huge farming population from the inflationary pressures of soaring international oil prices.
Shanghai Petrochemical plans to refine 9.5 million metric tons of crude this year, down slightly from 9.6 million tons in 2005, as the high cost of crude continues to erode its profitability. This is in comparison the net profit of CNY1.08 billion that the company recorded in the first three months of 2005. Shanghai Petrochemical posted an operating loss of CNY1.5 billion in its refining business in 2005. Its net profit last year fell 53% to CNY1.85 billion, which included a one-off state subsidy of CNY632.8 million to compensate it for low oil product prices.
07-Apr-06 
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