02 July 2012 06:32 [Source: ICIS news]
By Dolly Wu
June PMI showed a 0.2 percentage-point drop from May, continuing the decline registered in the previous month, according to the China Federation of Logistics & Purchasing, which released the official data on 1 July.
The number was barely above the threshold of 50%, which indicates expansion.
Demand recovery for most petrochemicals in the region is closely tied to how the Chinese manufacturing fares as the country is a major regional importer of raw materials.
The new orders index for the chemical industry last month had a reading below 50%, indicating a contraction, said Wei Tao, a chemical analyst from Guotai Junan Securities.
“This means the [domestic petrochemical] capacity is still in surplus and the demand is not good enough. Most market players are buying as needed because they are cautious on purchasing or ordering large volumes to avoid potential loss,” said Wei.
Most petrochemical producers in
Meawnwhile, exports orders for Chinese goods continued to slow down, as the country’s major markets in the West have yet to find a solid economic footing. The eurozone is still grappling with its debt crisis, while the
Its purchasing index, meanwhile, fell by 3.6 percentage points month on month to 41.2% in June, based on the data.
Market players in
The June PMI indicated that the Chinese economy is still under pressure but the slowdown may be easing soon, said Zhang Liqun, an analyst at the research and development centre of
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections