Production Increased with Price Decrease

By Feng Shiliang of CPCIA

In November 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 55
types increased compared with the same period of 2005,
accounting for 84.6% of the total. In November 2006, 80 out of
155 types of chemicals being tracked had a lower price than that
in October 2006, accounting for 52.3%, and 59 types of chemicals
had a higher price.

Production  

According to the statistics released by the National Bureau of
Statistics of China, the total output of crude oil reached 15.091
million tons in November 2006, an increase of 3% over the same
period of 2005, and the output of natural gas rose by 15.1% to
5.14 billion m3.
   In November 2006, the crude oil processing amount was 26.1
million tons, an increase of 6.4% over the same period of 2005.
The output of oil products increased constantly, of which the
output of gasoline was 4.833 million tons, a rise of 4.4% and
the output of diesel jumped by 6.7% to 9.97 million tons. However,
due to the slack demand, the output of kerosene dropped by 2%.
   In November 2006, the output of chemical fertilizers was 4.56
million tons, a rise of 15.5% compared with the same period of
2005, of which the output of urea was 1.887 million tons, a rise
of 10.6%. Pesticides output was 105 thousand tons, an increase
of 16.4% compared with the same period of 2005. Among the
pesticides, the output growth was 37.5% for herbicides, -8.5%
for insecticides and -11.3% for fungicides.
    The output of some inorganic materials increased
considerably in November 2006. Among them, the output growth was
10% for sulfuric acid, 8% for nitric acid, 15% for caustic soda
and 8.4% for soda ash.
  The output growth of the main organic materials decreased in
November 2006. The output growth was 7.9% for ethylene and 8.7%
for pure benzene, being lower than that in October 2006. Due to
slack market demand, the output of glacial acetic acid decreased
by 12.7%.
    In November 2006, the output of synthetic resins rose by
12.5% to 2.173 million tons in response of strong demand, of
which the output growth was 13.7% for PVC (polyvinyl chloride),
8.3% for PE (polyethylene), and 7.1% for PP (polypropylene)
respectively. However, the output of synthetic rubber was 147
thousand million tons in November 2006, being a slight drop of
2.3% from November 2005.
   The output of tires was 36.913 million pieces in November 2006,
a year-on-year increase of 5.1%, and the rubber shoes production
rose by 20.7% to 160 million pairs. However, the output of photo
film rolls dropped by 97.5%, impacted by digit camera.

Prices

The average spot price of Blent crude oil was US$58.92 per barrel
in November 2006, an increase of 1.9% compared with the same
period of 2005.In spite of drastic price drop of crude oil
downstream products in the past two months, the prices of most
chemicals are still higher than those in the same period of 2005.
The profit-earning ability of petrochemicals still remains at
a relatively high level.
   Inorganic materials' prices showed different price change
according to the demand. In November 2006, the average price of
sulfuric acid dropped considerably by 9.1% due to slack demand.
Due to the demand growth, the average price of caustic soda
(liquid) was RMB640 per ton in November 2006, a rise of 14.3%
over that in October 2006.
   The prices of quite a few organic materials dropped in
November 2006. The average price of toluene was RMB7 650 per ton
in November, a drop of 6.2% from that in October 2006, in response
to the large supply amount. Due to high inventory and slack
demand, the average price of xylene decreased by 5.3% to RMB9
000 per ton.
   The prices of chemical fertilizers remained stable in
November 2006. The average price of urea was around RMB1 755 per
ton, a slight drop of 0.3% from that in October 2006.
   The prices of synthetic resins continued to decrease in
November 2006. The average price of PVC, PS (polystyrene) and
PP decreased by 5.6%, 0.3% and 2.3% respectively compared with
that in October 2006.
    The prices of synthetic rubbers also showed an overall price
drop in November 2006 compared with those in October 2006 in
response to the price drop of butadiene and natural rubber, among
which the price drop was 3.9% for styrene-butadiene rubber and
1.2% for cis-1,4-polybutadiene rubber.