Sinopec cuts back (a little) on petchems

China’s Sinopec has taken a lead in reviewing its petrochemical expansion plans. Speaking to employees last week, Wang Tianpu, CPC division President, noted that ‘global crude prices may remain high and the petrochemical industry may become even more competitive’. Today, he gave more details, saying that they plan to lower 2008 petchem expenditure by 4.6bn yuan ($675m). This is certainly a small step in the right direction. But it is probably ‘too little, too late’.

All the ‘building block’ petchems (ethylene, propylene, benzene and paraxylene) face major over-capacity between 2010-14, even if Global Boom conditions return. Our newly-released ‘Feedstocks for Profit’ Study sets out the detail of the challenges ahead. Hopefully, its analysis will become required reading in the industry. Please contact me at phodges@iec.eu.com if you would like a copy of the Executive Summary, for discussion with your colleagues.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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