S Korea June petrochemical export volume grows; value falls 21%

23 July 2012 06:58  [Source: ICIS news]

By Nurluqman Suratman

Busan port in South KoreaSINGAPORE (ICIS)--South Korea’s exports of most petrochemical products in June grew by volume, with benzene registering the highest year-on-year increase at more than 83%, official data showed on Monday.

The country’s benzene shipments totalled 141,212 tonnes last month compared with 76,958 tonnes in the same period in 2011, according to the Korea International Trade Association (KITA).

About 29% of South Korea’s total benzene exports or 40,570 tonnes in June were shipped to the US, official data showed, as producers took advantage of the open arbitrage window to the US, where the aromatics product can be sold at a higher price.

Its overseas shipments of ethylene in June rose by 8% year on year to 85,972 tonnes, while exports of propylene increased by 38% to 108,886 tonnes, according to KITA.

Exports of paraxylene (PX) surged by 54% year on year to 229,741 tonnes, while overseas shipments of polyvinvyl chloride (PVC) jumped by 43% to 71,161 tonnes, based on official statistics.

Among the products that registered steep declines in June volume shipments are purified terephthalic acid (PTA) and linear low density polyethylene (LLDPE).

South Korea’s PTA exports slipped by 18% year on year or by 53,306 tonnes to 248,147 tonnes, while LLDPE shipments declined by 43% or 23,182 tonnes at 30,764 tonnes, KITA data showed.

In terms of value, however, the country’s petrochemicals exports in June declined by 21.2% year on year to $3.09bn (€2.56bn) because of lower prices amid weakening demand from its key markets such as China and the EU, said Lee Sung-Kwon, senior vice president and chief economist at Seoul-based Shinhan Investment.

“The Korean exports for petrochemicals and petroleum products have been sluggish due to the decline in Chinese [economic] growth and the European fiscal crisis,” Lee said.

Exports of petroleum products fell by 9.9% year on year to $4.73bn in June, he said.

Demand from China should recover in the second half of the year as government measures are introduced to boost domestic consumption, Lee said.

China – the world’s second largest economy – grew at its slowest pace in three years at 7.6% in the second quarter as external demand weakens.

“The Chinese economy should have bottomed out in the second quarter and is likely to show gradual recover in the third quarter so exports [from South Korea] is expected to rebound,” he said.

China’s economy is forecast to grow by around 8% in 2012, while the annual GDP growth rate for South Korea is expected at around 3%, according to Lee.

“For the EU, especially in southern Europe, the fiscal crisis is expected to continue through to the end of this year. Exports to Europe’s fiscal crisis regions should continue to show poor numbers,” he said.

South Korea’s petrochemical exports in the first six months of 2012, slipped by 1.9% to $22.1bn, according to its Ministry of Knowledge Economy (MKE), basing the data on the first 20 days of each month.

In terms of overall exports, shipments to China slipped by 1.2% over the period while sales to EU declined by 16%, MKE data showed. China accounted for 23.2% of South Korea’s overall exports, while the EU has a 9.3% share, according to the MKE.

($1 = €0.83)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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By: Nurluqman Suratman



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