China’s April petchem imports fall on weak demand, ample supply

28 May 2010 07:45  [Source: ICIS news]

SHANGHAI (ICIS news)--China’s petrochemical imports in April fell across the board on the back of weak demand, ample domestic supply and higher prices of imported materials, industry sources said on Friday.

“Looking at the figures for last month, we can conclude that China’s domestic consumption is not as strong as we expected,” Wang Huiqin, an analyst from Shanghai-based TX Investment Consulting Co said.

“Furthermore, new capacity additions, like the start-up of SABIC-Tianjin petrochemical complex, also eased the 'hungry demand' for these commodities from the world’s third-largest economy,” she added.

Following the start of the complex in January, China's imports of ethylene fell to 66,215 tonnes in April, 29% lower than the same period of last year and 9% less than March, according to the data from China Customs.

Butadiene imports plummeted by 63% year on year to 12,418 tonnes and dropped 33% from March volumes.

In addition, traders attributed the month-on-month imports slump of plastics-related chemicals, including polyethylene (PE), polypropylene (PP) and polyvinyl chloride (PVC), to the weak downstream demand.

April PVC imports decreased by 53% year on year to 106,910 tonnes and fell 28% from March, China Customs said.

“Last month, the PVC import prices were higher than domestic prices, which naturally lead to a fall in imports volumes. Domestic oversupply also weighed down the buying sentiment,” a trader said.

However, feedstock imports of polyester products, including purified terephthalic acid (PTA) and monoethylene glycol (MEG), bucked the trend and showed a 10% and 30% rise, year on year, to 474,049 tonnes and 633,738 tonnes respectively. Traders attributed "better downstream operations" as a factor for the increase.

“The feedstock inventory of downstream buyers is very low and the operating rate of polyester plants is around 80%. The textile sector is [performing] better than last year,” a trader said.

“Whether the petrochemical imports will show an upward trend in the next few months still depends on the recovery of downstream sectors,” Du Zhiqiang, an analyst from Shanghai-based Ping An Securities said.

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By: Judith Wang
+65 6780 4359

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