S Korea's Feb petchems exports grow amid domestic slump

20 March 2009 07:42  [Source: ICIS news]

By Terence Teo

SINGAPORE (ICIS news)--South Korea's petrochemical trade remained skewed towards more exports in February as domestic producers continued to look for an outlet for excess supply amid the slump in local demand, analysts and industry sources said on Friday.

Latest data from the Korea International Trade Association (KITA) showed exports of polyvinyl chloride (PVC) and low density polyethylene more than doubled in February to 67,013 tonnes and 38,462 tonnes, respectively.

Butadiene shipments also soared 82% to 24,423 tonnes while naphtha exports jumped 64% year-on-year. Toluene also registered a 60% increase in February over the same period last year while polymethyl methacrylate (PMMA) exports jumped 30%.

“Korea is still experiencing a decline in its domestic demand and a recovery may not be expected in the next quarter,” said Im Jee Soon, analyst of Goodmorning Shinshan Securities.

South Korea’s economy, like the rest of Asia, was badly shaken by the sharp decline in external demand that it is looking at its recession in more than a decade.

The weakness of the Korean currency – the won – has been helping to make the country’s more competitive and some producers were taking advantage of the strong demand from China for select petrochemicals, industry sources said.

In PVC’s case, South Korea has also been taking advantage of stronger demand in other key markets such as India and the Middle East.

On a month-on-month basis, exports of these products continued to increase in February, with butadiene shipments up 52% to 24,423 and mixed xylene exports surging 66% to 44,169 tonnes, among others.

The country’s petrochemical imports, on the other hand, have been steadily declining as the much weakened state of the economy could not absorb much supply and imports are deemed costly given the depreciation of the won, market sources said.

“Korean traders refused to take any imports because of the weakness in the domestic currency as it was viewed to be more expensive,” said a market source.

	IMPORTS			EXPORTS
	FEB ' 09	Mth on Mth	Yr on Yr	FEB '09	Mth on Mth	Yr on Yr
Product	(tonnes)	Growth (%)	Growth (%)	(tonnes)	Growth (%)	Growth (%)
Naphtha	1,550,527	25%	26%	203,831	49%	64%
Olefins
Ethylene	10,936	173%	-36%	52,598	-3%	-17%
Propylene	22,967	106%	-6%	43,275	-12%	47%
Butadiene	10,488	91%	-50%	24,423	52%	82%
Polymers
hdPE	355	-11%	-52%	122,507	2%	35%
ldPE	1,022	-41%	-33%	38,462	19%	105%
lldPE	988	77%	-19%	44,641	-9%	31%
Polypropylene	791	-39%	-35%	95,846	4%	-16%
PVC	2,341	-7%	-67%	67,013	3%	111%
Aromatics
Benzene	17,330	151%	17%	100,620	1%	-26%
Toluene	20,071	57%	-16%	86,015	20%	60%
Mixed Xylene (MX)	0	-100%	-100%	44,169	108%	20%
Paraxylene (PX)	82,516	15%	-14%	94,119	23%	-20%
Orthoxylene (OX)	0	0%	-100%	20,003	82%	26%
Intermediates
Styrene Monomer (SM)	54,464	13%	-11%	92,063	1%	-10%
Purified Terepthalic Acid (PTA)	238	34%	11%	265,506	3%	-15%
Polyethylene Terephthalate (PET)	1,537	73%	15%	72,263	-9%	-9%
Butadiene Rubber	743	-7%	-60%	21,071	-1%	34%
Ethyl Acetate (ETAC)	1,321	-42%	-26%	1,446	-15%	-47%
Vinyl Acetate Monomer (VAM)	1,860	33%	12%	3,348	-15%	-34%
Methyl Methacrylate (MMA)	3,272	59%	60%	0	0%	0%
Polymethyl Methacrylate (PMMA)	243	-42%	-86%	6,999	99%	30%
Ethanol	8,726	123%	-54%	151	76%	-5%
Paraffin Wax	2,100	34%	-2%	289	61%	-59%

Source: KITA

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By: Terence Teo
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