China chemical prices to stay low in Q2 on high capacity: NDRC

GUANGZHOU (ICIS news)--Prices of chemical products would largely hover in the low territories in China in the second quarter amid high levels of capacities and stocks, the country’s top economic planner said on Thursday.

"The majority of the chemical products were oversupplied currently, but some chemicals might see small price rebounds due to cost factors [higher feedstock prices] ," the National Development and Reform Commission (NDRC) said on its website.

Production cost of petrochemicals would remain high in the short term, on current strong crude prices, while demand would gradually rise, it added.

Prices of polyethylene (PE) decreased 2.3% from February to yuan (CNY) 11,330/tonne ($1,659/tonne) in March, while that of soda ash gained 5.6% from the previous month to CNY450/tonne in March, according to the NDRC, which gave price examples of only these two products.

Average prices of PE increased 32.6% year on year to CNY11,610/tonne in the first quarter, while that of soda ash declined 32.8% to CNY440/tonne, the NDRC added.

($1 = CNY6.83)