By Fu Xiangsheng, Vice President of CPCIF

In the first half of 2021, operating revenue of domestic petroleum and chemical enterprises above designated size grew 32.9% from a year ago to RMB6.7 trillion. Combined profits surged 335.5% YoY to RMB613.1 billion in H1, and as recently as 2020, enterprises abovementioned made less than that all year. If the upward momentum continues in H2, annual profits will exceed RMB1.2 trillion, a new record high. First-half foreign trade value reached US$401.03 billion, up 31.4% from the same period last year.

Seen from the three big sectors, the oil and gas sector still needed some time to increase profits to the level of 2019. The refining sector made profits of RMB123.96 billion, up RMB149.03 billion from a year earlier, and the chemical sector saw a profit soar of 190.3% YoY. Further, the three sectors all decreased proportions of enterprises suffering losses.

Output of most main petrochemical products, except phosphate fertilizers, increased in H1. In detail, output of crude oil grew for the third year in a row, up 2.4% YoY to 99.32 million tons. Processing volume of crude oil rose 10.7% YoY, pushing oil products output up 10.5% YoY. Gaining double-digit growth for many consecutive years, natural gas output was up 10.9% YoY to 104.46 billion cubic meters.

Output of sodium carbonate was up 5.6% YoY, that of caustic soda up 10.8% YoY, that of sulfuric acid up 9.1% YoY, and that of pure methanol up 7% YoY. As for others, synthetic ammonia output was up 4.7% YoY, and urea output up 2.4% YoY. Output of pesticides was up 13.8% YoY, with output of herbicides and bactericides up 15.5% YoY and 11.2% YoY, respectively. Output of synthetic resin was up 12.3% YoY. More specifically, polythene output was up 13.2% YoY, polypropylene output up 14.4% YoY and PVC output up 11% YoY. Output of synthetic rubber was up 10.8% YoY, and that of synthetic fiber monomer up 16.8% YoY.

With regard to consumption in H1, most petrochemical products saw increases, except diesel, nitrogen fertilizers and phosphate fertilizers. In detail, apparent consumption of natural gas was up 16.2% YoY, and that of oil products up 11.9% YoY (gasoline consumption, up 21.6% YoY; kerosene consumption, up 54.9% YoY; diesel consumption, down 4.2% YoY). Apparent consumption of ethylene was up 25% YoY, higher than 10.4% in caustic soda consumption and 10% in pure benzene consumption. Sodium carbonate consumption was up 6.2% YoY, and pure methanol consumption up 4.6% YoY. Further, apparent consumption of synthetic resin was up 2.9% YoY, with consumption of polythene, polypropylene and polystyrene up 0.2%, YoY, 5% YoY and 7.4% YoY, respectively. Synthetic fiber monomer consumption was up 5.4% YoY.

Prices of most petrochemical products have increased since November 2020, and shot up in Q1 2021. In the first half of 2021, ex-factory prices of petroleum and natural gas rose 26.7% YoY, and ex-factory prices of main chemicals grew 12.4% YoY. In addition, among 46 kinds of inorganic chemical materials investigated, 34 ones, or 73.9%, saw increases in average market prices, with 13 kinds seeing growth of over 20%. Seventy-six or 87.4% of 87 kinds of organic chemical materials investigated saw price growth, with 58 kinds seeing growth of over 20%. Most petroleum and chemical enterprises have reported first-half profits and revenue, and their performance is well above expectations (see Table 1 for details).