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Ethylene22-May-2024
SAO PAULO (ICIS)–A severe drought affecting
Mexico’s sate of Tamaulipas has prompted an
order to halve water supply to chemicals and
other industrial companies, although some
chemicals producers have said to ICIS they are
operating normally.
Tamaulipas is home to a petrochemicals hub in
Altamira, near Tampico, one of the largest
cities in the 3.5-million people state.
Some companies have said to ICIS they are not
affected by the restrictions. Others, however,
have declared force majeure due to the drought.
A spokesperson at Mexico’s chemicals major
Orbia said to ICIS that the company had not
been affected by the measure yet.
Alpek had not officially responded to a request
for comment at the time of writing.
However, a source at the company, another large
Mexican chemicals producer with operations at
the Altamira hub, said to ICIS that its
operations had so far not been affected either.
Meanwhile, INEOS Styrolution declared force
majeure from its facilities in Altamira on
20 May on the back of the water restrictions
imposed by the authorities.
The force majeure remains in place.
Tamaulipas, in Mexico’s east coast, is an
industrial export-intensive state bordering the
US; any reduction in operations due to water
shortages could mean a large financial hit to
companies.
The state of Tamaulipas department for
hydraulic services said on 20 May it would
prioritize human water consumption and, as well
as halving water supply to industry, banned
swimming pools or any other commercial
operations from using water.
“The water situation in Altamira is difficult
at this time … Although we have not received
any official communication from local
authorities on this matter to date, we are
committed to working in coordination and in
accordance with the authorities and government
measures that are taken,” said the Orbia
spokesperson.
Meanwhile, Mexico’s electricity grid operator
Cenace issued on 16 May a nationwide alert for
high temperatures of up to 45°C (113°F) which
could cause supply disruption.
The alert remained in place on Wednesday.
Cenace’s executive Mauricio Cuellar Ahumada,
said that according to the regulation Mexico’s
electricity system must have a 6% minimum
reserve so it is able to address sudden
increases in demand.
“It is important to highlight that the
operational measures [national alert]
determined by Cenace are carried out to achieve
a balance between demand and generation, as
well as to avoid negative impacts on the
system,” said the grid operator.
“This mechanism is used in different countries
around the world where, such as Mexico, there
are interconnected electrical systems. The
interruptions are carried out in a staggered
manner so that users do not remain for long
periods without electricity supply.”
Front page picture: The Port of Altamira,
Mexico’s state of Tamaulipas
Source: Altamira Municipality
Additional reporting by Daniel Lopes
Speciality Chemicals22-May-2024
LONDON (ICIS)–Although Germany’s
chemical-pharmaceutical sales and production
are forecast to increase this year, after sharp
declines in 2023, domestic demand remains weak
and the industry’s structural problems persist,
according to Henrik Meincke, chief economist of
chemical producers’ trade group VCI.
Weak domestic industrial demand
Pre-crisis chemical production levels not
in sight
Low capacity utilization reflects
structural problems
VCI’s 2024 forecast:
Sales: +1.5%
Export sales: +3.5%
Domestic sales: -1.5%
Chemical producer prices: -2.0%
Production: +3.5%
Production, excluding pharmaceuticals:
+5.0%
Employment: flat
DOMESTIC DEMAND
In the 2024 first quarter, domestic
chemical-pharmaceutical sales fell 9.3% year on
year, Meincke told participants in a webinar
presentation that accompanied VCI’s recent
Q1
report.
Excluding pharmaceuticals, the decline was even
worse, at 11.3%, as most domestic customer
industries curtailed production:
Building and construction: -1.4%
Plastics products sector: -3.6%
Metal production: -2.3%
Metal products sector: -6.4%
Autos: -8.2%
Food: +1.3%
Glass and ceramics: -11.3%
Paper: -0.8%
Printing products: -7.2%
Furniture: -10.9%
Machinery: -7.1%
Electrical equipment: -14.6%
CHEMICAL PRODUCTION
Despite a 5.4% year-on-year increase in 2024
first-quarter chemicals production (excluding
pharma), production in the chemicals industry’s
major segments remains below its levels from
2018, Meincke noted.
Production declines, from H2 2018 to H2
2023, by segment:
Total chemicals: -19.8%
Inorganic chemicals: -21.9%
Petrochemicals: -24.1%
Polymers: – 22.5%
Fine and specialty chemicals: -16.8%
Soap and detergents: -17.9%
In fact, Germany’s chemical production has
fallen back to its level from 1995 and the gap
between the country’s overall production and
chemical production has widened, Meincke said.
Production trends
(red line: overall goods producing sector;
blue line: chemicals; five-month moving
average; 2021 = 100):
(source: VCI)
STRUCTURAL PROBLEMS
The main reasons for the decline in Germany’s
chemicals production include high costs
for labor, raw materials and energy,
bureaucracy, a weak economy and a loss in
international price competitiveness, Meincke
said.
Although electricity and natural gas prices
have somewhat normalized, they were still much
higher than in 2019 and much higher than in
countries such as China, the US or France –
making it hard for Germany’s energy-intensive
industry to compete internationally, he said.
The low capacity rates in the chemical industry
reflect its “extremely difficult” situation,
Meincke said.
Chemical-pharmaceutical capacity utilization in
the 2024 first quarter was at 78.1% – a 10th
consecutive quarter in which the industry is
running “significantly” below normal rates of
82-85%, he said, adding that there were no
signs of a significant improvement.
As the under-utilization continues quarter
after quarter, companies will react by not
restarting idled capacities but rather shift
investments abroad, the economist said.
The crisis was so severe that it has triggered
“structural effects”, he said.
Eric Heymann, senior economist at Deutsche Bank
Research, who also presented at the webinar,
spoke of an “investment leakage”, meaning that
German companies will avoid making big
energy-intensive investments in the country but
rather invest abroad.
Heymann said one needed to distinguish between
Germany’s problems as a location for industrial
production and German industrial companies,
which may invest in Germany or elsewhere.
Although domestic sales are forecast to fall
this year, increased export sales should more
than offset this and VCI therefore forecasts a
1.5% increase in total 2024 sales.
Production is expected to rise 3.5% in 2024.
Production excluding pharmaceuticals should
rise 5.0%, which would follow a 10.4% decline
in 2023.
However, despite the expected year-on-year
increase, production will remain far from
pre-crisis levels, the industry’s structural
problems will persist, and companies are not
expecting a recovery any time soon, Meincke
said.
Focus article by Stefan
Baumgarten
Thumbnail photo of Steam cracker II at
BASF’s Ludwigshafen site; source: BASF
Crude Oil22-May-2024
LONDON (ICIS)–UK inflation fell to its lowest
level in almost three years in April, driven
down mainly by lower energy costs, according to
official data on Wednesday.
The Consumer Prices Index (CPI) rose by 2.3% in
the 12 months to April, down from 3.2% in the
12 months to March.
Lower gas and electricity prices resulted from
the UK energy regulator Ofgem lowering its
price cap in April, the Office for National
Statistics said.
“Prices of electricity, gas and other fuels
fell by 27.1% in the year to April 2024, the
largest fall on record, with figures available
back to 1989.”
On Tuesday, the International Monetary Fund
(IMF) upgraded its growth forecast for the UK
and said the economy was “approaching a soft
landing”.
Inflation closer to the Bank of England’s
target of 2% means that interest rate cuts are
more likely, with the IMF recommending cuts of
50-75 basis points this year.
UK CPI inflation hit a recent peak of 11.1% in
October 2022, the ONS said in its statement.
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Polyethylene22-May-2024
SINGAPORE (ICIS)–Freight rates for China’s
exports, including petrochemicals, have been
spiking in recent weeks and are expected to
remain firm in the next three to six months on
the back of improving overseas demand and amid
continued logistics disruptions in the Middle
East.
Geopolitical tensions translate to higher
shipping cost, longer delivery time
Container shortages intensifying in China
Freight rates to remain firm on strong
western demand
Most ocean carriers have halted transits in the
Red Sea, which is the fastest shipping route
between Europe and Asia, fearing missile
attacks by Yemen’s Houthi rebels.
They have opted to take the longer route via
the Cape of Good Hope, resulting in much longer
time and costs for moving cargoes to their
destinations.
The Red Sea crisis is showing no signs of
de-escalation, with the latest casualty being
the Panama-flagged oil tanker
M/T Wind bound for China, which
was struck by a Houthi-launched ballistic
missile on 18 May.
Logistics and supply chain disruptions are
expected to continue.
Dutch shipping giant Maersk had said on 6 May
that its vessels have been forced to lengthen
their journey further because of the expanded
risk zone and attacks reaching further offshore
in the Rea Sea.
“The knock-on effects of the situation have
included bottlenecks and vessel bunching, as
well as delays and equipment and capacity
shortages,” the company had said, estimating an
industrywide capacity loss of 15-20% on the Far
East-to-North Europe and Mediterranean market
during the second quarter.
CONTAINERS/VESSEL SPACE IN SEVERE
SHORTAGE
As carriers now need longer time to come back
from destinations, the resulting severe
shortage of containers and vessel space was
triggering sharp spikes in freight rates.
From Shanghai to the US west coast and the US
east coast, freight rates on 17 May jumped to
$5,025/forty-foot equivalent unit (FEU), and
$6,026/FEU, respectively, up by 14.4% and 8.3%
week on week, according to the Shanghai
Shipping Exchange.
To South America from China’s financial
capital, the shipping cost increased at a
sharper rate of 22.4%, while to Europe, freight
rates rose by 6.3%, the data showed.
A shipping broker said that China-to-Europe
freights have been soaring by $500-$800/FEU
each week since late April, while a
polypropylene (PP) trader noted that the rates
to West Africa more than tripled to $8,000/FEU,
more than a fourfold increase from
$1,500-$2,000/FEU rates in early April.
“We now need to wait 10-15 days for booking
containers. We face severe stockpiling and
warehouses are flooded with cargoes waiting for
shipment,” said a marketing manager of a
Shenzhen-based logistics company.
A plastic bag factory in east China is
currently stuck with high inventories and risk
suspending production, a source from the
company said
For vinyl acetate producers, a shortage of
shipping tanks prevents them from exporting
more cargoes, providing them with the
less-efficient means of bulk shipments with
other products as the only alternative.
ROBUST WESTERN DEMAND SUPPORTS FIRM
RATES
The recent spike in freight rates came as a
surprise to players in the petrochemical
industry as the May-June period is normally a
lull season for Chinese exports.
Besides the Red Sea crisis, strong demand
coming from the west underlies the recent surge
in freight rates.
“July-September is the peak season for
China-to-West shipping. With [the] destocking
last year, Europe and US markets demand are
expected to rise substantially before the
Christmas [season in December],” said Wang
Guowen, director of Shenzhen Logistics and
Supply Chain Management Research.
“Plus, Europe and UK central banks are expected
to cut interest rates, which will further
stimulate consumptions there,” he added, noting
that demand from both Europe and the US will
remain strong rest of the year.
This will continue to buoy up shipping rates,
which are projected to hover at high rates over
the next three to six months, industry sources
said.
On 16 May, Maersk announced a hike in peak
season surcharge (PSS) for major east-to-west
shipping lanes, including the China-to-Dar es
Salaam, Tanzania route, PPS for which increased
to $1,500/FEU since 20 May.
Meanwhile, French shipping and logistics major
CMA CGM plan to hike its Asia-to-northern
Europe freights to $6,000/FEU, effective 1
June.
Current container production in China could not
catch up with strong demand.
New China-manufactured containers to be
delivered before late June have been sold out,
a source at domestic logistics company said.
Wang of Shenzhen Logistics and Supply Chain
Management Research, however, noted that the
present container shortage is not about
undersupply but more about the sharp slowdown
in turnover amid the global logistics
disruptions.
Tight shipping conditions are expected to
prevail in the third quarter as demand is
expected to peak, with a gradual easing of
freight rates likely in the fourth quarter, he
said.
Focus article by Fanny Zhang
Additional reporting by Joanne Wang and
Lucy Shuai
Thumbnail image: At the container terminal
of Yantian Port in Shenzhen City, Guangdong
Province in south China, 16 May 2024
(Shutterstock)
Potassium Chloride (MOP)21-May-2024
HOUSTON (ICIS)–Canadian fertilizer major
Nutrien temporarily suspended operations at its
Rocanville, Saskatchewan, mine after a fatality
at the railcar loading facility this past
weekend.
The producer is investigating the 19 May
incident and cooperating with the review being
undertaken by Saskatchewan Ministry of Labour
Relations and Workplace Safety.
It expects to recommence the potash mine
facility, located approximately 250 kilometres
east of Regina, on 22 May.
“Following the tragic fatality of one of our
colleagues at our Rocanville mine on Sunday, 19
May, authorities have conducted investigations
at the site. Nutrien is carrying out its own
investigations. We continue to provide support
to all those affected by this tragic event,”
said Nutrien spokesperson.
The United Steelworkers union (USW) did
announce that it was one of their members who
was involved but the name has not been
released.
“Our community is in mourning over this tragic
incident at our mine site and our thoughts go
out to the family, friends and our union family
who are deeply impacted,” said Derek Palmer,
USW Local 7916 president.
Speciality Chemicals21-May-2024
HOUSTON (ICIS)–PPG plans to spend $300 million
to build a new plant in the US and to make
investments at existing sites in North America,
the paints and coatings producer said on
Tuesday.
“As we continue to see a resurgence of
manufacturing in the US, PPG will leverage this
new facility and our other site investments to
maximize quality, improve operational
efficiency and reduce product complexity within
our manufacturing footprint,” according to a
statement by Tim Knavish, PPG CEO.
The projects will start later in 2024 and span
a four-year period, PPG said.
The new plant will be in Loudon county,
Tennessee state, the company said. Construction
should start in August 2024 and finish in 2026.
When fully operational, the plant can produce
more than 11 million gal/year (42 million
liters/year.)
The plant will initially make paints and
coatings for automakers and auto parts
suppliers, the company said. Eventually, it
could supply other industrial segments,
including transportation, heavy duty equipment,
building and construction and consumer
products.
The plant in Loudon county will be the first
plant that PPG has built in the US in 15 years.
PPG will also expand and upgrade existing sites
in Cleveland, Ohio, US, and San Juan del Rio,
Queretaro state, Mexico.
The investments will cover new equipment and
processes that will make the plants more
efficient, PPG said. They will also allow the
plants to meet growing demand for sustainable
products, such as waterborne coatings.
The investments in the two existing sites and
the new plant do not represent a change in the
level of PPG’s overall capital investment
spending, the company said.
Thumbnail shows PPG’s headquarters.
Polypropylene21-May-2024
SAO PAULO (ICIS)–Braskem has restarted
operations at its Triunfo facility in the
flood-hit state of Rio Grande do Sul, which
will allow other players in the petrochemicals
hub to start up their plants as many depend on
input from the Brazilian polymers major to
operate.
On Monday (20 May), Braskem said it would
restart its units at
Triunfo – where the producer has around
one-third of its Brazilian production capacity
– with the expected process to take around two
weeks.
A spokesperson for Innova told ICIS that the
styrenics producer’s plants at Triunfo were
ready to begin operations as soon as Braskem,
which supplies Innova with key feedstock
benzene, had started up.
The spokesperson did not respond to questions
about the financial hit Innova would suffer
from the Triunfo outage, but said it had been
able to its supply customers with material from
its other units in Brazil.
“For polystyrene [PS], for instance, our Manaus
production unit was able to absorb the tonnage
previously allocated to Triunfo, so that we
could avoid any negative impact on our
customers,” said the spokesperson.
Meanwhile, a source at Innova told ICIS late on
Monday that it aims to restart its PS, styrene,
and ethyl benzene (EB) plants on 22-23 May.
However, due to low production volumes, it
would be prioritizing customers in Brazil
rather than exporting any material.
The restart process, however, may not be
without hiccups. A source in Brazil’s
petrochemicals industry said on Tuesday that
highway BR-386, a 525-kilometer road linking
Porto Alegre with the interior of the state as
well as the south of Santa Catarina state,
remains partially blocked.
“Drainage is still a problem. The blockage of
the BR-386 and the lack of trucks are making
distribution very difficult,” said the source.
“Yesterday [Monday], they managed to dispatch
15 trucks out of Triunfo, while the daily
average on normal days stands at around 400
trucks.”
THE BEGINNING OF THE
ENDIn what has become one of
Brazil’s worst flooding disasters, the state of
Rio Grande do Sul came to a standstill on 29
April with hundreds of roads blocked,
widespread landslides and a dam collapse.
As of Monday, the floods had caused 157 deaths
while another 88 people are unaccounted for,
according to Rio Grande do Sul’s emergency
services.
Over 76,000 people are still taking refuge in
shelters, while nearly 600,000 have been
displaced from their homes. In the 12-million
people state, nearly 2.5 million have been
affected by the floods which have badly hurt
its economy.
Although petrochemicals plants at Triunfo
have not been damaged by the flooding, access
to them became almost impossible at the peak of
the crisis.
This forced companies in the hub to declare
force majeure, including Braskem, Innova, and styrene
butadiene rubber (SBR) producer Arlanxeo.
As of Tuesday, none of the force majeures had
officially been lifted.
Indorama’s subsidiary in Brazil said it was
idling its plants,
although it has yet to declare force majeure.
A spokesperson for Indorama told ICIS that the
situation at its plants remains unchanged from
last week.
Arlanxeo had not responded to a request for
comment at the time of writing.
Although petrochemical facilities at Triunfo
are restarting, other industrial players are
still reeling from the floods with widespread
stoppages.
Earlier this week, automotive global majors
Volkswagen (VW) and Stellantis said they were
stopping production
at some Brazilian and Argentinian plants due to
a lack of input from automotive parts producers
in Rio Grande do Sul.
Meanwhile, fertilizers players have said to
ICIS that demand could be hit, potentially
resulting in lower prices as Rio Grande do Sul
is also a major agricultural state in Brazil.
Analysts at S&P Global said that while
petrochemicals producers in the state may be
spared from a large financial hit, fertilizers
players are likely to be more
negatively affected.
Front page picture: Braskem’s facilities at
the Triunfo petrochemicals hub in Rio Grande do
Sul
Source: Braskem
Additional reporting by Bruno Menini
Crude Oil21-May-2024
LONDON (ICIS)–Oil benchmarks could be subject
to bearish sentiment this week amid rising
demand concerns.
Minutes from the latest US Federal Reserve
meeting and US economic data due this week will
provide further clarity on future monetary
policy.
ICIS experts look ahead to the likely factors
that will drive oil prices in Week 21.
Crude Oil21-May-2024
SINGAPORE (ICIS)–China’s industrial output
grew by 6.7% year on year in April, signalling
a further strengthening of its manufacturing
sector, but weaker retail sales and bleak
property data suggest that its overall growth
momentum remains weak.
The April industrial output reading accelerated
from the 4.5% expansion in the previous month,
data from the National Bureau of Statistics
(NBS) showed.
The strong April data brought year-to-date
growth to 6.3% year on year, and industrial
activity looks like it will be one of the main
growth drivers in the second quarter of the
year.
The transition toward high-tech manufacturing
continues to be one of the major driving forces
for China’s industrial output.
High-tech manufacturing grew 11.3% year on year
in April, and 8.4% over the first four months
of the year, while auto production also
rebounded strongly, up to 16.3% in April up
from 9.4% in March.
The upbeat manufacturing outlook follows
earlier April data which showed the country’s
exports and imports both returning to growth in
April after contracting in the previous month,
while the official April manufacturing
purchasing manager’s index (PMI)
remained in expansionary territory at 50.4
in April from 50.8 in March.
Despite a partial retreat after peaking during
the pandemic, China’s share of global goods
exports has recently rebounded, reaching 14.7%
in the second half of 2023, up from 14% in the
first half and exceeding pre-pandemic levels of
13.3% in 2019, according to Christine Peltier,
an economist at French bank BNP Paribas.
In addition, China’s recent market share gains
have been recorded across a wide range of
products, including low value-added consumer
goods such as furniture and toys, organic
chemicals and plastics, vehicles, electrical
and electronic machinery and equipment and
parts thereof, she noted.
They have been particularly impressive for
electric vehicles, with export volumes
multiplied by 7 between 2019 and 2023, solar
panels, exports multiplied by 5 between 2018
and 2023, and lithium batteries.
These three products accounted for around 4% of
China’s total exports in 2023, about three
times their 2019 share.
The flood of Chinese products has given rise to
growing concerns among industrial entrepreneurs
and governments in the US, the EU and now
emerging countries, and is likely to lead to
new trade confrontations in the coming months,
Peltier added.
RISKS STILL OUTWEIGHING
POSITIVES”While we acknowledge
the resilience in some parts of the [China]
economy amid this economic rebalancing, we
believe these are insufficient to outweigh the
drags from the property woes and geopolitical
headwinds,” Nomura Global Markets Research said
in its Global Economic Outlook Monthly
report.
“Export growth is holding up steadily for now,
thanks to cheap prices and resilient external
demand, but could face further headwinds as
countries launch anti-dumping investigations,”
it said.
Although China’s
export growth has been strong this
year due to the global tech upswing, resilient
external demand, and competitive prices, rising
trade tensions may hinder the export sector and
prompt more supply chain relocations away from
China in the long term.
US President Joe Biden
is increasing tariffs on $18 billion worth
of imports from China, including electric
vehicles (EVs), semiconductors, batteries, and
other goods. The White House stated that this
decision is a response to unfair trade
practices and aims to protect US jobs.
In response, China’s Ministry of Commerce
announced that it “will take resolute measures
to safeguard its own rights and interests.”
PRIVATE CONSUMPTION REMAINS
WEAK
April’s data revealed that retail sales growth
fell to a new post-pandemic low, further
indicating a shift away from consumption as a
primary growth driver for 2024.
Retail sales growth fell to 2.3% year on year
in April, slowing from the 3.1% expansion in
March, bringing the year-to-date growth rate to
4.1%.
The largest drag to retail sales in April was
tied to automotive sales, which declined by
5.6% year on year, and the data may add fuel to
the fire for the critics of China’s
overcapacity in this sector.
Another major category, household appliances,
also slowed to 4.5% year on year. As trade-in
policies take effect later in the year, these
categories could see some recovery, Dutch
banking and financial information services firm
ING said in a note.
“Consumption growth is likely to remain
moderate through most of 2024, as consumer
confidence remains downbeat amid tepid wage
growth and the lingering negative wealth
effects from the past several years of
declining asset prices,” it said.
“A possible bottoming out of prices would also
take some time before translating to stronger
consumer activity.”
HOUSING SECTOR CONTINUES TO
SLUMPThe persistent weakness in
China’s property sector, accounting for roughly
a quarter of its economy, continues to weigh on
overall economic growth.
April data showed that in the 70-city sample
from the NBS, property prices continued to
slide.
New home prices fell by 0.58% month on month in
April, and secondary market prices fell by
0.94%, which were the steepest sequential
declines since the start of the housing slump
in 2021.
At the city level, 69 out of 70 cities
continued to see declining prices in the
secondary home market in April, unchanged from
March.
Although new home prices rose in 6 out of 70
cities, including Shanghai and Tianjin, the new
home market’s performance was weaker in April
compared to March when 11 out of 70 cities saw
price increases.
Separately, property investment fell by 9.8%
year on year in January-April, extending the
9.5% contraction in January-March, NBS data
showed on Friday.
China is now exploring a bold plan to revive
its struggling property market by having local
governments purchase millions of unsold homes.
Chinese authorities on 17 May pledged new
support to enable state-owned enterprises to
purchase unsold apartments, aiming to provide
developers with more funding to complete
pre-sold properties.
The People’s Bank of China also on 17 May
eliminated the minimum mortgage interest rate
and reduced the minimum down payment ratio for
both first-time and second-time home buyers.
“A recent flurry of supportive policy
announcements including removing purchase
restrictions, housing “trade-in” policies, and
plans to directly purchase housing units for
social housing programmes, has boosted market
optimism that we will see a bottoming out of
housing prices sometime this year,” ING said.
As these policies roll out in the coming months
and help alleviate downward pressure on
property prices, data indicates that homebuyers
may still remain cautious and on the sidelines
until a trough is established, it said.
“While it is arguably one of the most important
signs of a stabilization of sentiment in China,
it is worth noting that a potential bottoming
out of housing prices would only be the first
step; elevated housing inventories will likely
keep real estate investment suppressed for some
time yet, and the property sector will remain a
major drag on the economy this year,” ING
added.
Recent announcements from local governments,
including the Dali government of Yunnan
Province, have expressed intentions to
facilitate the acquisition of existing homes
for conversion into public housing, Singapore’s
OCBC Bank said in a note.
This move is seen as a way to not only address
the housing surplus but also potentially
stimulate economic growth by increasing public
spending and boosting the construction sector.
Moreover, China’s Finance Ministry announced on
13 May a plan to issue 1 trillion yuan of
ultra-long special bonds over a period of six
months, ending in November.
This moderate issuance pace marks only the
fourth time in 26 years that China has employed
this type of debt for fiscal stimulus, allowing
for targeted spending.
China has set an ambitious economic growth
target of around 5% this year, a level which
analysts are cautiously optimistic about. The
world’s second-largest economy expanded by 5.3%
in the first quarter of this year.
Thumbnail photo: A man rides a scooter next
to a construction site of residential buildings
in China (Source: ANDRES MARTINEZ
CASARES/EPA-EFE/Shutterstock)
Insight by Nurluqman Suratman
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