FocusS Korea petrochemical exports to stay weak near term -analysts

27 September 2012 06:19  [Source: ICIS news]

By Nurluqman Suratman

SINGAPORE (ICIS)--South Korea’s petrochemical exports will likely continue to falter for the rest of the year, after registering an annual double-digit decline in August, on slowing demand from key markets, analysts said on Thursday.

“We cannot see a short-term rebound for our exports even though there are signs of a recovery in the US market,” said Sung-kwon Lee, a senior vice president and chief economist at South Korea-based Shinhan Investment Corp.

“Korean exporters are having difficulties due to the slowdown in the Chinese market and the EU,” he added.

A third of South Korea’s exports heads to China on a monthly basis, according to Lee.

China, the EU and the US could account for about half of the country’s overall monthly exports, he said.

For the first 20 days in August, South Korea’s petrochemical exports fell by 12.3% year on year to $3.6bn (€2.8bn), according to the Ministry of Knowledge Economy (MKE).

Chemical exports were weighed down by lower prices and demand from China, said Sangmin Park, a petrochemical industry analyst at Shinhan Investment Corp.

“If you look at seasonality, demand drops during the winter season, so Korea’s petrochemical exports are unlikely to recover anytime soon,” Park said.

The country’s exports of ethylene dropped by 12% year on year to 75,445 tonnes in August 2012, while shipments of low density polyethylene fell by 21% to 23,843 tonnes, according to data from the Korea International Trade Association (KITA). (please see table below)

Its shipments of purified terephthalic acid (PTA) were down by 21% year on year to 242,175 tonnes, while exports of acrylonitrile declined by 31% to 12,991 tonnes, the data showed.

South Korea may continue to see slumping exports in September, following sharp declines in July and August, said Lee of Shinhan Investment Corp.

Its exports declined by 6.2% in August, following an 8.8% decline in July. In the first eight months of 2012, the country’s exports were down by 1.5% year on year.

Lee is projecting South Korea’s overall exports this year to slip by 2.4% to about $541bn.

Sluggish exports, as well as weak domestic demand, will see the South Korean economy decelerating its growth pace to 2.5% this year from 3.6% in 2011, he said.

“Demand from home and abroad continues to contract, prompting local firms to reduce output further,” said Ronald Man, an economist at financial institution HSBC.

“With the Chinese economy yet to show signs of a meaningful recovery, policymakers in Korea need to support domestic demand as trade levels remain suppressed,” Man said.

HSBC’s South Korea Purchasing Managers’ Index (PMI) report for August showed that new export orders declined for the third straight month, while output shrank at the fastest pace in eight months. 

EXPORTS (in metric tonnes)

 

 

 

 

PRODUCT

Aug '12

Aug '11

Difference

YoY

% Change YoY

Ethylene

75,445

86,078

-10,633

-12.35

Benzene

123,067

112,405

10,662

9.49

Polypropylene

105,575

93,267

12,308

13.20

Polyethylene

117,519

101,241

16,278

16.08

LLDPE

54,607

49,447

5,160

10.44

LDPE

23,843

30,181

-6,338

-21

HDPE

117,519

101,241

16,278

16.08

Toluene

123,547

78,309

45,238

57.77

Propylene

82,234

84,140

-1,906

-2.27

Butadiene Rubber

27,219

25,209

2,010

7.97

Buta-1,3-diene and isoprene

23,621

14,832

8,789

59.26

Styrene

107,011

127,201

-20,190

-15.87

Paraxylene

163,064

174,237

-11,173

-6.41

PET

71,138

71,467

-329

-0.46

Mixed Xylene Isomers

52,587

37,624

14,963

39.77

PTA

242,175

307,670

-65,495

-21.29

MMA

982

569

413

72.58

PMMA

8,926

7,612

1,314

17.26

Orthoxylene

6,652

7,752

-1,100

-14.19

Expansible polystyrene

12,154

13,938

-1,784

-12.80

Acrylonitrile

12,991

18,923

-5,932

-31.35

Polycarbonate

43,249

34,985

8,264

23.62

Ethyl Acetate

825

580

245

42.24

Vinyl Acetate Monomer

4,784

7,857

-3,073

-39.11

Paraffin Wax (slack wax and scale wax)

491

470

21

4.47

P-wax with less than 0.75%

44

105

-61

-58.10

PVC (not mixed with other substances)

63,156

56,373

6,783

12.03

PVC (non-plasticised)

103

69

34

49.28

PVC (plasticised)

1,718

1,706

12

0.70

PVC (In aqueous dispersion)

22

15

7

46.67

($1 = €0.78)
By: Nurluqman Suratman



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