16 March 2011 10:18 [Source: ICIS news]
SHANGHAI (ICIS)--China’s petrochemical prices may rise with feedstock costs as imports from Japan have been disrupted following the 11 March earthquake and tsunami, analysts said on Wednesday.
“Shutdowns and rotational power blackouts in Tokyo and other Japanese cities will affect and cut Japan’s petrochemical production, so the exports to China will also be hurt,” said Xiao Hui, an analyst from brokerage firm Huatai United Securities in Shenzhen.
Several crackers and petrochemical plants in Japan, including polyethylene, toluene di-isocyanate (TDI) and propylene oxide (PO) plants were shut down after the earthquake, according to earlier reports from ICIS.
Xiao added: “Reduced supply will directly lead to an increase for some chemical product prices in China, as China imports a lot of chemical feedstocks from Japan.”
In 2010, China imported 217,842 tonnes of ethylene from Japan, out of a total 815,405 tonnes of ethylene imports.
Japan is the second largest exporter of ethylene to China after South Korea, China’s customs data showed.
A research note from China’s Everbright Securities in Shanghai said the olefins plant shutdowns in Japan could possibly cause a price increase for olefin products.
China imported 1m tonnes of paraxylene (PX) from Japan last year, the largest amount out of its total PX imports of 3.5m tonnes, customs data showed.
Japan’s methyl ethyl ketone (MEK) sector, which makes up 20% of global capacity, may also be affected by the quake and tsunami.
However, a source from Sinopec’s subsidiary, Maoming Petrochemical, said he had doubts on whether Japan’s cuts in output would eventually push up Chinese domestic prices as the current economic environment was very “volatile” amid higher inflation and geopolitical uncertainties in the Middle East and North Africa.
Shares of Sinopec rose 0.71%, PetroChina edged up by 0.09% and Qixiang Tengda grew 1.08% at the close of trading on Wednesday.
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