UpdateSingapore September petchem exports fall 8% on soft prices

17 October 2011 08:08  [Source: ICIS news]

(adds analysts’ comments, more details, with recasts throughout)

By Nurluqman Suratman

SINGAPORE (ICIS)--Singapore’s exports of petrochemicals in September fell 8% year on year, as product prices declined in tandem with international crude values and amid weakening demand, an analyst at credit ratings firm Standard & Poor’s said on Monday.

Exports were valued at Singapore dollars (S$) 1bn ($794m), according to International Enterprise Singapore (IE Singapore).

Economic worries in the US and the eurozone depressed oil prices in September, forcing manufacturers in Singapore to lower product prices, said Andrew Wong, a Singapore-based petrochemical analyst at credit ratings firm Standard & Poor’s.

“Oil prices have been reduced, products prices have come down, and because of weaker demand, we see a seasonal impact [on exports],” Wong said.

Brent crude futures fluctuated between a low of $108.07/bbl to a high of $113.26/bbl in September, while NYMEX WTI futures hit a low of $84.47/bbl and a high of $88.33/bbl during the month.

Among petrochemical products, benzene almost had an 11% decline in average spot prices in September from August, while ethylene saw a 6.2% fall in average values over the same period, according to ICIS.

In Asia, the petrochemicals demand and supply situation is roughly balanced, with a softening of demand in China – the region’s major importer of petrochemicals; Thailand in excess supply, and; Indonesia continuing as a net importer, Wong said.

Global energy majors Shell and ExxonMobil have petrochemical manufacturing sites in Singapore that serve the Asian market.

With lower product prices and oil prices reduced, Singapore’s export volumes of petrochemicals may pick up towards the end of this year and carry on into the next year, Wong said.

Singapore’s overall non-oil domestic exports in September declined 4.5% year on year, a reversal of a 3.9% increase recorded in August, as shipments to the US shrank 35%, data from IE Singapore showed.

Singapore is an open economy that relies heavily on exports for growth, making it more vulnerable than the rest of Asia to the financial and economic troubles in the US and Europe.

The country’s GDP growth forecast this year was cut to just around 5% from 5-6% previously, according to the Ministry of Trade and Industry (MTI).

“Indeed, much will depend on the development in Europe and the US. A resilient Asia domestic demand will help, but a lot really depends on how the economic situations in the US and the Eurozone pan out and the policy responses,” Singapore-based DBS Group Research said in a note.

In September, Singapore’s non-oil domestic exports to three out of its 10 major markets, declined, IE Singapore said. Shipments to emerging markets, which include the Middle East, fell by 13%, official data showed.

In the non-electronic non-oil domestic exports, in which petrochemical and pharmaceutical exports are lumped, the city-state recorded a marginal increase of 0.9% in September, according to the data.

“The rise in non-electronic NODX was led by pharmaceuticals, civil engineering equipment parts and printed matter,” IE Singapore said.

($1 = S$1.26)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Nurluqman Suratman

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