Production Increased with Price Rise

By Feng Shiliang of CPCIA

In the first two months of 2007, 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 2006, and the
output of 25 types, in particular, grew by over 20%. In the first
two months of 2007, over 60% of 151 types of chemicals being
tracked had a higher price than the same period of 2006.

  Production

In the first two months of 2007, China’s total output of crude
oil reached 30.436 million tons, a rise of 2.5% over the same
period of 2006, and the output of natural gas grew by 12.7% to
11.6 billion m3, the growth being 22.4 percentage points lower
from the same period of 2006.
   In the first two months of 2007, the processing amount of
crude oil was 51.384 million tons, an increase of 5.7% over the
same period of 2006, and the growth being 1.8 percentage points
higher. The output of gasoline and diesel continued to increase,
of which the output of gasoline was 9.881 million tons, a rise
of 7.1% and the output of diesel increased by 4.1% to 19.104
million tons. The output of kerosene dropped 7.8% to 1.621
million tons.
    In the first two months of 2007, the output of chemical
fertilizers reached 8.331 million tons, a rise of 9.1% over the
same period of 2006, and the growth being 2.4 percentage points
lower. Among the chemical fertilizers, the output of nitrogenous
fertilizers and urea was 6.471 million tons and 4.046 million
tons, an increase of 5.4%, 2.0% respectively over the same period
of 2006, and the growth being 4.3 percentage points and 4.7
percentage points lower. The output of phosphorus fertilizers
was 1.724 million tons, a rise of 15.7%, and the growth being
slightly higher.
    Due to the expanded capacity, China’s output of basic
chemical materials continued to increase rapidly, and organic
materials, in particular, showed drastic increase. In the first
two months of 2007, the output of ethylene and methanol was 1.736
million tons and 1.544 million tons, an increase of 27.1% and
50.4% respectively over the same period of 2006, and the growth
being 1.3 percentage points and 15.2 percentage points higher.
The output of pure benzene was 857 thousand tons, a rise of over
50% and the output of glacial acetic acid dropped by 13.4% to
213 thousand tons.
    The growth of inorganic materials was slightly lower
compared with organic materials. In the first two months of 2007,
the output of sulfuric acid and concentrated nitric acid reached
7.699 million tons and 319 thousand tons, a rise of 12.3% and
19.9% respectively over the same period of 2006. The output of
ionic membrane caustic soda was 978 thousand tons, an increase
of 24.0% and the output of soda ash grew by 8.8% to 2.714 million
tons.
    The international oil price fluctuates at a relatively low
level, the pressure of production cost on synthetic resin
manufacturers has been partially mitigated. Besides, with the
completion of renovation for ethylene units, the output of
synthetic resins has increased considerably. In the first two
months of 2007, China’s output of synthetic resins reached
5.317 million tons, an increase of 34.6% over the same period
of 2006, and the growth being 13.1 percentage points higher. The
output of PVC (polyvinyl chloride) was 1.402 million tons, a rise
of 23.1%, and the growth being 4 percentage points higher.
   The output of synthetic rubbers reached 304 thousand tons in
the first two months of 2007, an increase of 9.8%, among which
the output of cis-1,4-polybutadiene rubber increased by 7.2% to
77 thousand tons. Besides, the output of synthetic fibers
reached 3.143 million tons, a rise of 14.5%.
   The output of radial tires showed drastic increase in the
first two months of 2007. The output of radial tires reached
30.747 million pieces, a rise of 33.9% over the same period of
2006, and the growth being 7.8 percentage points higher. The
output of rubber shoes rose by 21.3% to 260 million pairs.

  Prices

Inorganic materials’ prices showed different change rates
according to the demand. In February 2007, the average price of
sulfuric acid, hydrochloric acid and nitric acid was RMB400/t,
RMB570/t and RMB2 210/t, a drop of 23.1%, 9.5% and 4.7%
respectively over the same period of 2006. Due to supply deficit
caused by the demand increase, the average price of soda ash
reached RMB1 621 per ton, a rise of 3.2% over the same period
of 2006.
   In February 2007, the average price of acetic acid was RMB6
190/t, a drop of 4.8% from the same period of 2006, and the
average price of methanol increased by 33.3% to RMB3 400/t.
    The prices of most chemical fertilizers increased in
February 2006. Due to the demand increase and transportation
problem, the average price of urea in February 2007 rose by 4.4%
to RMB1 785/t.
    The prices of synthetic resins continued to increase in
February 2007. The average price of PVC reached RMB7 350 per ton,
an increase of 2.1% over the same period of 2006. The prices of
PE (polyethylene) and ABS (acrylonitrile-butadiene-styrene)
also increased over 10%.