18 May 2012 05:29 [Source: ICIS news]
KUALA LUMPUR (ICIS)--The South Korea Petrochemical Industry Association (KPIA) hopes to see a steady recovery following a weak beginning in first half of the year, the chairman said on Friday.
Chong Bum-Shick said that in 2011, with tight supply, the association had hoped to see a recovery in the world petrochemical industry.
“However, the impact of the financial crisis led to an overall decline in the market cycle,” he said.
“In 2012, we are still experiencing decreased profitability and weak performances as raw material prices have gone up and the recovery of the market in China is delayed. “However, we hope to see a slow but steady recovery in the second half of the year as the Chinese economy recovers and as limited new capacity increases are expected,” he added.
Bum-Shick was speaking at the 34th annual Asia Petrochemicals Industry Conference (APIC) being held in ?xml:namespace>
“I believe that the petrochemical industry faces the task of resolving the structural problem oversupply and identifying new engine of growth,” he said.
“In order to meet the challenge, we must pursue various development strategies including technology convergence with other industries and business diversification,” he added.
In a report by the KPIA, looking at the prospects for 2012, domestic petrochemical production is expected to increase by 3.1% year on year to 21.9m tonnes, following a reduction in the number of regular plant maintenances compared with the previous year and the expansion of capacity on the back of new planned investment.
Domestic demand is expected to increase by 3.3% to 10.9m tonnes, the report added.
However, with uncertainties of worldwide economic conditions, exports are expected to show a downturn trend in the first half of the year, but a rebound is anticipated to follow and a steady growth in demand is expected in accordance with the implementation of a domestic-oriented growth policy, KPIA said.
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