Production Rose while Prices Moved up   

Feng Shiliang, CPCIA

In October 2007 China's petroleum and chemical industry remained considerable increase in production. Among the 65 types of petrochemical products that have been tracked by CPCIA (China Petroleum and Chemical Industry Association), the output of 57 types increased compared with the same period of 2006, and the output of 45 types, in particular, grew by over 10%. Among 164 chemicals recorded, 46 chemicals had lower prices than in the preceding month, and 88 chemicals had higher prices. Compared with the same period of 2006, 96 types and 63 types respectively had higher and lower prices.

Production      
In October the output of natural gas remained high growth of 24.3%, reaching 6.03 billion m3.
   Except hydrochloric acid, other major inorganic products all had an increase in output. The output of ethylene increased 10.9% compared with October 2006, and the production of pure benzene and methanol still kept high growth.
   In spite of the season, the production of chemical fertilizers still grew in October. The output of urea was 2.163 million tons, a year-on-year increase of 13.1%. Helped by the rapid growth of herbicide production, the pesticide output grew rapidly.
    The output of synthetic resin and synthetic rubber reached 2.682 million tons and 189 000 tons in October 2007, increasing by 21.9% and 24.1% respectively.

Prices in October
The prices of the chemical products in the domestic market maintained at high level in October, due to the high price of petrochemicals globally and the high cost of energy, resources and environmental protection domestically.
   Due to the vigorous demand and shrinking supply, the retail prices of gasoline and diesel both remained at a high level in most regions of China.
   Supported by the brisk demand, tight supply and high cost of raw materials, most of inorganic chemical raw materials showed price increase. In response to the great demand for sulfuric acid in the phosphate fertilizers production, the average prices of sulfuric acid was RMB592/t, an increase of 1.4% from a month before, while the average prices of sulfur rose 1.5% to RMB2 030/t.
   Organic chemical raw materials suffered price fluctuations in October. The prices of aromatic products including toluene, xylene, o-xylene and styrene went up, while the prices of alcohol products descended down. The price of pure benzene continued to drop with the average price reaching RMB9 175/t. Besides, the average prices of methanol rose by 16.2% to RMB3 580/t.
  The price of synthetic resin remained unchanged. Due to the low inventory, the price of natural rubber continued to rise. The average price of natural rubber (SCR5) was RMB22 250/t, an increase of 13.5% from that in September 2007.