07 July 1997 00:00 [Source: ACN]
SOUTH Korean petrochemical exports surged 51% for the first 20 days in June compared to the same period last year, taking even industry sources by surprise.
Many, however, expect exports to decline slowly in H2, but said exports will continue to be higher than in 1996.
A Seoul-based analyst said that while Chinese buying boosted exports, especially in Q1 this year, demand was expected to drop from June as Chinese producers completed restocking. China accounts for close to half of South Korean exports (ACN 16 June, p5).
He noted that more South Korean producers were looking to ship to other parts of Asia, a further indication that producers were preparing for the drop in demand from China.
Expanded production capacity in South Korea, led by purified terephthalic acid (PTA) production increases, were behind the jump in June's exports, he said. 'PTA exports were US$6.7m in April 1996, but they accounted for US$25.2m in April 1997.'
The analyst added that the year-on-year figures were also high because of poor 1996 performance.
An industry source said higher production volumes will boost petrochemical exports by about 25% in 1997. However, weaker product prices in H2 brought on by increasing supply from other regional players will mean the value of exports will grow by only 15-16%.
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