China's petchem exports in '10 to face resistance - sources

07 April 2010 15:31  [Source: ICIS news]

SHANGHAI (ICIS news)--China’s petrochemical exports this year will face resistance as a result of the large capacities expected to come on stream from the Middle East, while domestic consumption will continue to absorb petrochemical products, industry source said on Wednesday.

With many petrochemical plants in the Middle East due to start up this year, their production of low-cost chemicals such as monoethylene glycol (MEG), polyethylene (PE) and polypropylene (PP) will be competitively priced compared with China’s output of similar products, sources said.

“The imported prices of some chemicals will lower around 30% than domestic products,” said Feng Shiliang, vice secretary-general of the China Petroleum and Chemical Industry Association (CPCIA).

Feng was speaking at the 3rd annual China Petrochemical Summit in Shanghai.

Supply has still outstripped demand in the global petrochemical market despite the world economy’s slow recovery, making 2010 a difficult year for China’s petrochemical exports, Feng said.

China’s domestic consumption of petrochemical products will be key amid the government's massive stimulus package for the country's petrochemical industry, sources said.

“The housing and auto markets will continue to show good growth trend, aiding the consumption for petrochemicals,” said Shu Zhaoxia, chief analyst with Sinopec Economics and Development Research Institute.

China’s revenue from the petroleum and chemical industries is expected to grow by around 13-15% in 2010, Feng said at the summit, echoing the findings of a report released by the CPCIA in February.

The 3rd annual China Petrochemical Summit takes place in from 6-8 April.

For more on MEG, PE and PP, visit ICIS chemical intelligence
Read John Richardson and Malini Hariharan’s Asian Chemical Connections blog
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By: Judith Wang
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