Production Increased with Low Prices Growth
By Feng Shiliang of CPCIA


In August 2006, China's petroleum and chemical industry remained
up trend in production. Among the 65 types of petrochemical
products that have been tracked by CPCIA (China Petroleum and
Chemical Industry Association), the output of 54 types increased
compared with the same period of 2005, accounting for 83.1% of
the total. In August 2006, 68 out of 155 types of chemicals being
tracked had a higher price than that in July 2006, and 63 types
of chemicals had a lower price.

Production

According to the statistics released by the National Bureau of
Statistics of China, in August 2006, the total output of crude
oil reached 15.543 million tons, being the same as that in August
2005, and the output of natural gas grew by 15.3% to 4.82 billion
m3.
     In August 2006, the crude oil processing amount was 25.138
million tons, an increase of 3.5% over August 2005. Due to the
decrease of the crude oil processing amount in CNPC, the output
of gasoline and kerosene dropped considerably compared with that
in August 2005, of which the output of gasoline was 4.543 million
tons, a drop of 0.2% and the output of kerosene decreased by 16.8%
to 817 thousand tons. The output of diesel increased slightly
by 1.4% to 9.695 million tons.
     In August 2006, the chemical fertilizers output increased
by 7.5% compared with August 2005, however the output dropped
to 4.257 million tons, being the lowest monthly output since
March 2006. Pesticides output was 94 thousand tons, an increase
of 33% compared with the same period of 2005. Among the
pesticides, the output growth was 61% for herbicides, 22.1% for
insecticides and 36.5% for fungicides.
     Due to the brisk demand of downstream products, the output
of some inorganic materials increased considerably in August
2006. Among them, the output growth was 14.6% for concentrated
nitric acid, 9.6% for hydrochloric acid, 18.1% for caustic soda
and 12.5% for soda ash.
     The production of the main organic materials increased
considerably in August 2006, of which the output growth was 6.4%
for ethylene, 6.1% for pure benzene, 22.9% for methanol and 11%
for acetic acid.
     Due to expanded capacity, the output of synthetic resins
further increased. The output of synthetic resins had a growth
of 12.2% in August 2006 in response of strong demand, of which,
the output of PE (polyethylene), PP (polypropylene) and PVC
(polyvinyl chloride) increased by 4.4%, 8.5% and 19.4%
respectively. Synthetic rubber's output gained as high as 15.1%
to 159 thousand tons in August 2006, and the output of synthetic
fibers increased by 9.9%.
     The output of tyres was 35.359 million pieces in August 2006,
a year-on-year increase of 15.9%, and the rubber shoes' output
rose by 26.6% to 140 million pairs.

Prices

Inorganic materials' prices showed different price change
according to the demand. In August 2006, the price of liquid
chlorine dropped drastically by 10.3% due to the large supply
amount and downstream demand decrease. The average price of
hydrochloric acid was RMB460 per ton in August 2006, a drop of
2.1% from July 2006. However, due to supply deficit caused by
low operating rate, the average price of heavy soda ash was RMB1
625 per ton, a rise of 0.3% over that in July 2006 and the average
price of caustic soda (liquid) increased by 3.2%.
     Due to considerable fluctuation of oil price, the prices
of quite a few organic chemical products showed different price
change in August 2006. Among the 73 types of organic products
being tracked by CPCIA, most of the products showed a price rise.
CPCIA reported that the prices of propylene, butadiene, toluene,
pure benzene and methanol in August 2006 presented a certain rise
compared with July 2006. Pulled by the downstream demand growth,
the average price of PTA (purified terephthalic acid) reached
RMB9 800 per ton in August 2006, an increase of 2.1% over that
in July 2006. The price of n-butanol jumped by 11.6% due to the
low operating rate, and the price of methanol dropped slightly.
      The price of fertilizers decreased in August 2006. Due to
the demand decrease and the output increase, the average price
of urea in August 2006 dropped by 1.6% from that in July 2006.  
     The prices of synthetic resins continued to increase in
August 2006. Pulled by the price rise of calcium carbide,
ethylene and VCM (vinyl chloride monomer), the price of PVC
increased greatly. The average price of PVC produced by using
calcium carbide process reached RMB7 600 per ton, an increase
of 6.9% over that in July 2006. The price of PE also increased
considerably, of which the price growth was 3.4% for HDPE (high
density polyethylene), and 1.5% for LDPE (low density
polyethylene).
     In August 2006, the price of natural rubber continued to
decrease. The average price of natural rubber reached RMB23 500
per ton, a drop of 4.3% from July 2006. The prices of synthetic
rubbers showed different price change in August 2006. The
average price of styrene-butadiene rubber was RMB18 950 per ton,
an increase of 3.6% over that in July 2006, and the average price
of nitrile rubber rose by 0.5% to RMB19 100 per ton.