FocusS Korea H1 petrochemical exports to slow down on poor demand

27 January 2012 09:48  [Source: ICIS news]

By Nurluqman Suratman and Samuel Wong

SINGAPORE (ICIS)--South Korea’s exports of petrochemical products will likely slow down in the first half of this year, weighed by poor demand expected from industrialised economies in the West, and from China – its biggest market, analysts said on Friday.

In December 2011, South Korea’s petrochemical shipments grew by 32.4% year on year to $4.2bn (€3.2bn), with exports to China growing the strongest ahead of the Lunar New Year holidays, they said.

About 70% of South Korea’s petrochemical exports go to China, said Anthony Kim, an analyst at Seoul-based brokerage Woori Securities.

In terms of volume, the country’s overseas shipments of most petrochemical products had an annual increase in December, data from the Korea International Trade Association (KITA) showed.

For aromatics, the exports of benzene surged by 45.4%, while toluene shipments more than doubled to 106,250 tonnes. (please see table below)

South Korea’s outbound shipments of propylene surged by 49.7%, while its exports of ethylene slipped by 1.21%, the data showed.

Paraxylene (PX) exports more than doubled to 168,258 tonnes, while shipments of naphtha increased by 44.5%, it showed.

While export volumes of petrochemicals may continue to grow in the next few months, the outlook on prices is not as buoyant despite the high values of upstream crude and naphtha, said Kim of Woori Securities.

“Despite strong export numbers polymer prices have remained almost stagnant since November [2011],” Kim said.

Over the next six months, a double-digit growth in petrochemical exports posted in December is highly unlikely to be seen, since even the Chinese economy is slowing down, said Sangmin Park, an analyst at Seoul-based Shinhan Investment Corp.

“We forecast a recovery phase for the petrochemical industry [when] Asian economies start to head into an uptrend from the second half of 2012,” Park said.

Growth in China – the world’s second biggest economy and Asia’s largest – has been decelerating in response to its government’s monetary tightening measures to tame inflation. The country logged a fourth-quarter growth of 8.9% - the slowest recorded in two and a half years.

A shift to a more loose monetary policy in the country is widely expected this year, in support of economic growth, as inflation has been contained.

China is expected to roll out economic stimulus packages,” said Park, adding that this would be good news for South Korea.

For the whole of 2011, South Korea’s exports of petrochemical products grew by 27.4% year on year to $45.5bn, according to data from the Ministry of Knowledge Economy (MKE).

Its export of petroleum products, meanwhile, surged 63.9% to $51.7bn, the data showed.

“Even amid external uncertainties, including political unrest in the Middle East and the devastating earthquake in Japan, exports of ships and petrochemicals drove growth beyond 2010 levels,” the MKE said.

EXPORTS (in metric tonnes) 

PRODUCT

December  '11

December '10

YoY Difference

% Change YoY

Naphtha

410,873

284,414

126,459

44.46

Ethylene

61,902

62,661

-759

-1.21

Benzene

114,768

78,922

35,846

45.42

Polypropylene

87,013

61,718

25,295

40.98

Polyethylene

98,702

87,587

11,115

12.69

LLDPE

36,858

44,404

-7,546

-16.99

LDPE

25,398

16,891

8,507

50.36

HDPE

98,702

87,587

11,115

12.69

Toluene

106,250

47,846

58,404

122.07

Propylene

110,204

73,596

36,608

49.74

Butadiene Rubber

34,673

18,266

16,407

89.82

Buta-1,3-diene and isoprene

24,089

19,452

4,637

23.84

Styrene

118,408

115,608

2,800

2.42

Paraxylene

168,258

83,996

84,262

100.32

PET

91,206

83,434

7,772

9.32

Mixed Xylene Isomers

41,317

40,596

721

1.78

PTA

327,123

307,240

19,883

6.47

MMA

3,311

3,740

-429

-11.47

PMMA

7,985

7,644

341

4.46

Orthoxylene

10,851

14,652

-3,801

-25.94

Expansible polystyrene

9,707

8,086

1,621

20.05

Acrylonitrile

21,747

19,985

1,762

8.82

Polycarbonate

33,391

24,538

8,853

36.08

Ethyl Acetate

1,021

207

814

393.24

Vinyl Acetate Monomer

5,860

10,254

-4,394

-42.85

Paraffin Wax (slack wax and scale wax)

544

890

-346

-38.88

P-wax with less than 0.75%

109

120

-11

-9.17

PVC (not mixed with other substances)

53,834

51,575

2,259

4.38

PVC (non-plasticised)

51

131

-80

-61.07

PVC (plasticised)

1,696

2,002

-306

-15.28

PVC (In aqueous dispersion)

24

46

-22

-47.83

($1 = €0.76)


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


By: Nurluqman Suratman



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