UpdateChina May petrochemical imports fall on weak domestic demand

27 June 2011 11:50  [Source: ICIS news]

(adds paragraphs 5-11 on China economy, plastics demand)

By Dolly Wu and Pearl Bantillo

China May petrochemical imports fall on weak domestic demandSHANGHAI (ICIS)--China’s import volumes of petrochemical products mostly declined in May as domestic demand continued to shrink, industry sources said on Monday.

Its naphtha imports fell by 29% year on year to 107,201 tonnes, while propylene imports only reached 73,580 tonnes, down by 32% compared with the same period last year, according to data from China Customs.

The country took in 55% less butadiene (BD) product in May at 7,269 tonnes over the same period last year due to rising import prices, according to the data.

Its benzene imports were halved to 11,745 tonnes while toluene imports fell by more than a quarter to 47,194 tonnes, official data showed.

China’s economy has been slowing down, affecting overall petrochemical demand, as its government continued to tighten monetary policy in order to rein in inflation, which soared to a three-year high of 5.5% in May.

“All the evidence from consumption data, trade numbers, converter buying patterns and price movements over the last three months point to a marked slowdown in Chinese plastic resin demand since the end of the first quarter of 2011,” HSBC Global Research said in its June report on commodity chemicals.

Particularly worrying is that China’s demand for synthetic resins slipped into negative territory in March for the first time in 25 months, and remained in the red in April, HSBC said.

“We expect to see significant pricing pressure within the commodity chemicals segment in the near term as low affordability and tighter credit are constraining demand,” HSBC also said.

China, the world’s second-largest economy, is widely expected to continue with a quantitative tightening of monetary policy, with another 50-basis point increase in the bank reserve ratio and a 25-basis point hike in interest rates potentially on the horizon, HSBC said.

HSBC is “less sanguine about a demand recovery” with resin demand growth for China only projected at 5% this year against a consensus forecast of 11-13%.

“We do not expect to see a near-term demand recovery unless we get to a lower price environment,” HSBC said in the report.


2011-May

Import

Export

Product

Import (tonnes)

YoY growth (%)

MoM growth (%)

Export (tonnes)

YoY growth (%)

MoM growth (%)

Naphtha

107,201

-29%

-18%

45,797

-74%

-

Ethylene

69,397

-2%

27%

0

-100%

-100%

Propylene

73,580

-32%

-30%

0

-

-100%

Butadiene

7,269

-55%

-61%

13,731

82%

187%

HDPE

253,783

-5%

-5%

31,861

255%

27%

LDPE

113,049

-2%

5%

9,838

47%

3%

LLDPE

179,087

11%

-2%

10,948

429%

40%

PP

247,760

-15%

-3%

20,605

145%

14%

PVC

79,931

-23%

-24%

102,710

227%

45%

EPS

6,390

3%

-1%

36,112

43%

-4%

Benzene

11,745

-50%

40%

9,446

5%

49%

Toluene

47,194

-26%

-8%

3,208

1512%

2764%

MX

17

-43%

1600%

117

216%

200%

PX

402,441

50%

7%

17,619

-

-62%

SM

218,127

-30%

-25%

25,848

73751%

39%

PTA

399,193

-13%

-12%

3,003

-

-25%

MEG

548,438

4%

7%

309

4%

-34%

ACN

40,138

20%

-25%

0

-

-

Caprolactam

46,029

-15%

-19%

2,085

208400%

0%

Phenol

53,543

6%

-23%

9,131

65%

46%

Methanol

568,338

37%

14%

389

274%

-19%

Acetone

31,607

-42%

-41%

50

-38%

-56%

BPA

35,590

9%

-18%

1,223

135%

163%

IPA

7,855

-32%

-15%

370

222%

17%

MEK

2,202

-36%

-6%

15,044

358%

58%

Base oil

212,175

-5%

-27%

23,566

327%

100%

MMA

7,347

3%

-47%

10,139

72%

116%

PMMA

19,450

-8%

-6%

636

-61%

-57%

GAA

2,733

-39%

-55%

5,073

-28%

71%

BA

3,084

-22%

66%

5,227

-32%

-18%

2EHA

788

-62%

-30%

423

-72%

69%

2-EH

19,859

-40%

-22%

56

-5%

-69%

NBA

39,062

-38%

10%

1,072

35633%

3148%

PA

4,628

-50%

-37%

1,152

196%

6676%

DOP

3,019

-88%

-52%

1,547

17%

0%

Polysilicon

5,273

64%

-7%

99

-53%

-11%

Source: China Customs

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By: Dolly Wu
+65 6780 4359



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