By China Petroleum and Chemical Industry Federation

China’s petroleum and chemical industry developed soundly in 2021, with major economic indicators growing, especially in the first half of 2021. In the last two quarters, some problems gradually became obvious, including decelerated demand growth, rising costs of raw materials, periodical imbalance of supply and demand, etc. The major indicators are forecast by the China Petroleum and Chemical Industry Federation to grow at a slower pace in the first half of 2022, but the growth may accelerate in the second half.

The number of domestic petroleum and chemical enterprises above designated size reached 26 947 in 2021, when their combined operating revenue hit a new record high of RMB14.45 trillion, up 30% from 2020. By sectors, annual operating revenue of the petroleum and natural gas exploration and production sector was up 28.3% YoY to RMB1.1 trillion, that of the refining sector up 30.1% YoY to RMB4.4 trillion, and that of the chemical sector up 31.1% YoY to RMB8.7 trillion.

Total profits of these enterprises reached an all-time high of RMB1.16 trillion in 2021, soaring 126.8% from a year earlier. More specifically, the petroleum and natural gas exploration and production sector contributed RMB165.04 billion, skyrocketing 533.8% YoY; the refining sector, RMB187.4 billion, surging 318.2% YoY; the chemical sector, RMB793.22 billion, rising 85.4% YoY. Most segments under the chemical sector made profits, except the coal chemical segment, which suffered more losses.

Crude output was up 2.4% YoY to 199 million tons, and natural gas output up 8.2% YoY to 205.26 billion cubic meters, both in 2021. Crude processing volume reached 703 million tons, up 4.3% YoY. Output of oil products was up 7.9% YoY to 357 million tons, with diesel output growing 2.7% YoY, gasoline output rising 17.3% YoY and kerosene output falling 2.6% YoY. Output of major chemicals was up 5.7% YoY in 2021. In detail, output of ethylene was up 18.3% YoY, higher than 7.8% of pesticide technical production. Synthetic material output was up 6.9% YoY, and fertilizer output saw a slight growth of 0.8% YoY, versus a decrease of 0.9% YoY in 2020. Output of cover tires was up 10.8% YoY.

Total import and export value of the petroleum and chemical industry broke the previous record, increasing 38.7% YoY to US$860.08 billion in 2021, including export value of US$295.55 billion (up 41.8% YoY) and import value of US$564.54 billion, up 37.1% YoY. Trade deficit was up 32.3% YoY to US$268.99 billion. Crude imports saw the first decrease of 5.3% YoY since 2001 to 513 million tons, lowering external dependence by 1.6 percentage points YoY to 72%. Imported natural gas amounted to 169.79 billion cubic meters, up 20.7% YoY, resulting in a higher external dependence of 44.4%, up 2.8 percentage points YoY. Export volume of oil products fell for the second year in a row, down 11.8% YoY to 40.33 million tons, and that of fertilizers was up 12.9% YoY to 32.9 million tons.

Foreign trade structure was optimized. More specifically, import volume of organic chemicals was down 13.7% YoY, while export volume up 30.1% YoY, decreasing net imports by 26.4% YoY to 42.01 million tons. Net imports of synthetic materials declined 39.1% YoY to 28.21 million tons, given a reduction of 18% YoY in import volume and a soar of 68.1% YoY in export volume.

Investment resumed growth momentum. Fixed-asset investment in the petroleum and natural gas exploration and production sector was up 4.2% YoY in 2021, versus a decrease of 29.6% YoY in 2020. Investment in the chemical sector was up 15.7% YoY in 2021, while down 1.2% YoY in 2020. The oil, coal and other fuel processing sector saw an investment growth of 8% YoY, down 1.4 percentage points from 2020.