China C2 output to fall 1.7% in 2012 on weak demand - analyst

24 October 2012 04:53  [Source: ICIS news]

SINGAPORE (ICIS)--China is expected to produce 15.3m tonnes of ethylene this year, down by 1.7% from 2011 amid slowing domestic demand, an analyst from Chinese refining major Sinopec said on Wednesday.

The country’s domestic consumption of ethylene is estimated at 32.5m tonnes for 2012, growing at a slower annual pace of 3.8% compared with 4.9% in the previous year, Sinopec chief analyst Shu Zhaoxia said at the Downstream Asia 2012 conference in Singapore.

In 2013, China's ethylene output is expected to hit 17m tonnes, boosted by new production capacities and higher operating rates, Shu said.

Sinopec’s ethylene production capacity will be increased by 800,000 tonnes/year in 2013 once its plant in Wuhan starts operations in the second quarter of next year, Shu said.

The company is expected to run its crackers at full tilt in 2013, she said.

Sinopec's overall ethylene production is expected to grow to 10.1m tonnes next year from 9.66m tonnes in 2012, according to Shu.

"The demand increase from polyethylene (PE) and ethylene glycol is the main driver of ethylene equivalent growth in 2013," she said.

China's demand for PE and ethylene glycol is projected to increase by 4.5% and 9.0%, respectively, in 2013, Shu said.

Overall ethylene demand in China is projected to grow by 3.0-6.7% next year to 33.5m-34.7m tonnes, she said.

By 2015, China’s domestic demand for ethylene is expected to hit 38.8m tonnes, partly boosted by strong consumption of linear low density polyethylene (LLDPE).

PE consumption in 2015 will account for 56.6% of overall ethylene demand, according to Shu.

Downstream Asia 2012 runs on 24-25 October and is part of the Singapore International Energy Week.

By: Nurluqman Suratman

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