China’s new stimulus policy – A good sign for chemical markets?

CHINAS STIMULUS POLICYThe economic growth in China is slowing down and Sino-US trade war is undergoing during the economic downturn, which have caused weak demand. Under such urgent circumstances, there come increasing export tax rebate and rumour of 50% cut to car purchase tax which have drawn attention from chemical market. From ICIS view, these 2 policies can benefit petrochemical market and alleviate market supply pressure in short term. In long term, increasing export tax rebate can help more China petrochemical products to be part of global trade considering that 7 world-class integrated refinery and petrochemical bases will be built. What is important is that new petrochemical trade surplus and deficit status worldwide will occur, especially Asia, which will result in new global trade flow. 50% cut to car purchase tax is difficult to have long-term effect. The combination of policies is needed to stimulate domestic demand.

Key topics covered:

  • Increasing export tax rebate can relieve the negative impact caused by Sino-US trade war on enterprises who export petrochemical terminal products and promote petrochemical material to export more at the same time.
  • After integrated refinery and petrochemical bases will have been built, increasing export tax rebate will alleviate market supply pressure by enabling domestic products to be part of global trade and influencing global trade flow.
  • 50% cut to car purchase tax can only stimulate domestic demand in short term. The extra demand for upstream material created by the policy is limited.

    Government Agency / MinistryIndustry AssociationRegulatorStatutory BoardOther
    AcidsAlcoholsAromaticsBase Oil / Lubes / Motor OilButadiene / C4 / ElastomersFertilizers / Agri ProductsFibre ChainIntermediatesOlefinsOleochemicalsPhenolics, Chlor-alkaliPolymers / Polyolefins / ThermoplasticsSolventsSurfactantsNaphthaPolyurethane chainSpecialty ChemicalsOther
    Carbon EmmissionsCrude OilLNG / Natural GasRefinery By-Products / Petroleum / LPGNaphthaCoal / HydrocarbonGasoline / Jet Kerosene / Fuel OilsPower or ElectricityAcidsAlcoholsAromaticsBase Oil / Lubes / Motor OilButadiene / C4 / ElastomersFertilizers / Agri ProductsFibre ChainIntermediatesOlefinsOleochemicalsPhenolics, Chlor-alkaliPolymers / Polyolefins / ThermoplasticsSolventsSurfactantsPolyurethane chainSpecialty Chemicals
    Carbon EmmissionsCrude OilLNG / Natural GasRefinery By-Products / Petroleum / LPGNaphthaCoal / HydrocarbonGasoline / Jet Kerosene / Fuel OilsPower or ElectricityOther
    Asset ManagementBrokerageCommodity TradingExchange / Trading PlatformFinancing / LoansInvestments / AcquisitionsInsuranceOther
    ChemicalsFertilizers / Agri ProductsCrude OilRefinery By-Products / Petroleum / LPGCoal / HydrocarbonLNG / Natural GasGasoline / Jet Kerosene / Fuel OilsNaphthaGeneral Shipping / Ship BrokingOther Consumer Products and ServicesOther Industrial or B2B Services
    Polymer compounders / MasterbatchesAuto Parts / Automobile / TransportFoams / Insulation MaterialsElectronicsFood and BeverageFurniture / Appliances / Home FinishingsMedical / PharmaceuticalPaints / Adhesives / Dyes / Pigments / Epoxy ResinPersonal Care / Soap / Cleaning ProductsPackaging Materials / Plastics OEMPipes / Tubes / Gaskets / Sealants / CablesPulp / PaperRubber Products / TyresTextiles / Yarns / Garments / FabricsOther Consumer Products and ServicesOther Industrial or B2B Services
    Crude OilLNG / Natural GasOil Refinery / Refinery Gases / PetroleumNaphthaCoal / HydrocarbonGasoline / Jet Kerosene / Fuel OilsPower or Electricity ProviderMining / Metals / MineralsRenewable Energy / BiofuelsOther
    AcidsAlcoholsAromaticsBase Oil / Lubes / Motor OilButadiene / C4 / ElastomersFertilizers / Agri ProductsFibre ChainIntermediatesOlefinsOleochemicalsPhenolics, Chlor-alkaliPolymers / Polyolefins / ThermoplasticsSolventsSurfactantsUpstream FeedstockPolyurethane chainSpecialty ChemicalsOther
    Crude OilLNG / Natural GasOil Refinery / Refinery Gases / PetroleumNaphthaCoal / HydrocarbonGasoline / Jet Kerosene / Fuel OilsMining / Metals / MineralsAcidsAlcoholsAromaticsBase Oil / Lubes / Motor OilButadiene / C4 / ElastomersFertilizers / Agri ProductsFibre Chain IntermediatesOlefinsOleochemicalsPhenolics, Chlor-alkaliPolymers / Polyolefins / ThermoplasticsSurfactantsSolventsOther
    Oil Refinery / Refinery Gases / PetroleumNaphthaAcidsAlcoholsAromaticsBase Oil / Lubes / Motor OilButadiene / C4 / ElastomersFertilizers / Agri ProductsFibre ChainIntermediatesOlefinsOleochemicalsPhenolics, Chlor-alkaliPolymers / Polyolefins / ThermoplasticsSurfactantsSolventsOther
    Business SchoolUniversityOther
    ConsultingEngineering / ContractorResearch / Information ServiceLaboratory / R&D FacilitySoftware / Technology ServiceOther Consumer Products and ServicesOther Industrial or B2B Services

    We want to keep you up-to-date with what’s happening at ICIS* and tell you about our latest products and other services. We may email you about information we think you’ll be interested in, including selected articles and reminders about forthcoming events. If you do not wish to receive such information please tick the box to opt out of these emails

    *ICIS is a tradename of Reed Business Information Limited. By registering your details, you understand that your personal data will be handled according to our Privacy Policy

    CHINAS STIMULUS POLICY

    The economic growth in China is slowing down and Sino-US trade war is undergoing during the economic downturn, which have caused weak demand. Under such urgent circumstances, there come increasing export tax rebate and rumour of 50% cut to car purchase tax which have drawn attention from chemical market. From ICIS view, these 2 policies can benefit petrochemical market and alleviate market supply pressure in short term. In long term, increasing export tax rebate can help more China petrochemical products to be part of global trade considering that 7 world-class integrated refinery and petrochemical bases will be built. What is important is that new petrochemical trade surplus and deficit status worldwide will occur, especially Asia, which will result in new global trade flow. 50% cut to car purchase tax is difficult to have long-term effect. The combination of policies is needed to stimulate domestic demand.

    Key topics covered:

    • Increasing export tax rebate can relieve the negative impact caused by Sino-US trade war on enterprises who export petrochemical terminal products and promote petrochemical material to export more at the same time.
    • After integrated refinery and petrochemical bases will have been built, increasing export tax rebate will alleviate market supply pressure by enabling domestic products to be part of global trade and influencing global trade flow.
    • 50% cut to car purchase tax can only stimulate domestic demand in short term. The extra demand for upstream material created by the policy is limited.

    Thank you!

    Please see your content below:

    Access your content here

    Stay ahead of market movements in China’s chemical markets with unparalleled ICIS data and analytics

    Pricing data

    If you require data to power your decisions for your business in and out of China, then our pricing data solutions is the perfect tool to help you understand the Chinese domestic markets and to navigate them confidently.

    • Gain immediate access to import and domestic prices for actively traded commodities
    • Stay informed on hot topics and latest developments, such as changes in government policies and regulations, as well as their implications for the chemicals sector
    • Know what prices local buyers, sellers and traders are willing to transact at with a list of confirmed bids and offers
    • Gain visibility on major plant operations and production capacities
    • Understand how feedstock/upstream prices affect the downstream commodity markets you participate in
    • Grasp the supply and demand fundamentals of key chemicals markets with timely import and export data
    • Understand the macroeconomic factors and market sentiments shaping the chemicals markets in China and the implications for the markets you trade in

    Request a free demo>>

    Petrochemicals Analytics Solutions

    Together with each pricing report subscription, ICIS now provides the following diagnostic and prescriptive solutions, to help you make critical business decisions and plan for the future:

    • Live Supply Disruption Tracker – Real-time view of domestic and global supply, plant outages and start-ups for the next 12 months, plus the impact of these changes
    • Price Drivers Analytics – Key performance indicators, such as import/export parity, feedstock and downstream spreads, substitution trends and arbitrage/netback data
    • A Quarterly Supply and Demand Outlook – Available for key chemical commodities

    Request a free demo>>

    Download document here

    RELATED DOWNLOADABLE CONTENT