Production Increased with Price Rise

By Feng Shiliang of CPCIA   

In April 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 61 types increased
compared with April 2006, accounting for 93.8% of the total, and
the output of 15 types, in particular, grew by over 20%,
accounting for 23.1%. In April 2007, over 48.3% of 151 types of
chemicals being tracked had a higher price than March 2007.

  Production

In April 2007, China's total output of crude oil reached 15.407
million tons, a rise of 2% over April 2006, and the output of
natural gas rose by 16.7% to 5.35 billion m3, being slightly
higher than that in April 2006.
   In April 2007, 26.659 million tons of crude oil was processed,
an increase of 5.6% over April 2006, with the growth being 0.8
percentage points lower than that in March 2007. The output of
gasoline, diesel and kerosene reached 15.899 million tons, a
rise of 5.5%, with the growth being 0.5 percentage points lower.
Refiners raised the yield of kerosene and gasoline according to
the market demand, and the output of kerosene and gasoline was
930 thousand tons and 4.869 million tons, an increase of 15.2%
and 6.4% respectively over the same period of 2006. The yield
of diesel reduced and the output of diesel was 10.1 million tons,
a rise of 4.3%. The output of lubricating oil and fuel oils
increased rapidly with a growth of 10.5% and 13.4% respectively.
   Due to the support by the state's policies and brisk demand,
the output of agrochemicals continued to increase in April 2007.
The output of chemical fertilizers reached 5.228 million tons,
a rise of 15.3% over the same period of 2006. Among the chemical
fertilizers, the output of urea and phosphate fertilizers was
2.058 million tons and 1.221 million tons, an increase of 13.6%
and 15% respectively over the same period of 2006. Pesticides'
output was 168 thousand tons, a rise of 33.6% compared with April
2006, among which the output of insecticides, bactericides and
herbicides reached 61 thousand tons, 12 thousand tons and 59
thousand tons, an increase of 5.9%, 32.5% and 56.8%
respectively.
   In April 2007, except for caustic soda with lower growth due
to the overhaul in some enterprises, the output growth of major
inorganic materials was higher than that in March 2007. The
output of soda ash reached 1.402 million tons, an increase of
14.3% over April 2006, and the output of nitric acid (containing
100% HNO3) and calcium carbide rose 36.4% and 18.2%
respectively.
   Due to the expanded capacity, organic materials showed rapid
output growth in April 2007. The output of ethylene reached 837
thousand tons, a rise of 11.9% over April 2006, and the output
of methanol and glacial acetic acid rose 30.6% and 12%
respectively.
   In April 2007, the output of plastic resins and copolymers
rose by 14.2% to 2.456 million tons in response of strong demand,
among which the output of PE (polyethylene), PP (polypropylene),
and PVC (polyvinyl chloride) increased by 11.3%, 8.4% and 23%
respectively compared with April 2006.
   The output of synthetic rubbers reached 170 thousand tons in
April 2007, an increase of 12.8% over April 2006, and the output
of synthetic fiber monomers rose 18.6% to 1.792 million tons.
   The output of tires showed rapid growth in April 2007. The
output of tires reached 41.768 million pieces, a rise of 23.3%
over April 2006, among which, the output of radial tires rose
30.3% to 18.719 million pieces.
  Prices

With the price rise of crude oil and the increase of operating
rate in downstream enterprises, China's chemical market showed
stable and up trend.
   Inorganic materials' prices showed different price change
according to the demand. In April 2007, the average price of
sulfuric acid was RMB470/t, basically equal to that in March 2007.
Due to the demand rise in downstream sectors and export increase,
the average prices of caustic soda and soda ash were RMB650/t
and RMB1 650/t, a rise of 1.6% and 0.6% respectively over those
in March 2007.
   In April 2007, due to the price rise of crude oil and the
demand increase of downstream sectors, most organic materials
showed a price growth. The average prices of toluene, xylene and
styrene were RMB7 690/t, RMB8 210/t and RMB12 290/t, a rise of
0.7%, 1.3% and 3.1% respectively over those in March 2007.
   The prices of most chemical fertilizers increased slightly
in April 2007 compared with March 2007. The average prices of
urea, diammonium phosphate, and potassium chloride rose 0.8%,
0.4% and 0.4% respectively over those in March 2007.
   The prices of most plastic resins continued to increase in
April 2007 due to the increasing operating rate in downstream
processing companies. The prices of PVC, HDPE (high density
polyethylene), PP and PS (polystyrene) rose by 3.5%, 1.2%, 0.4%,
and 3.8% respectively compared with those in March 2007.
   Due to the price rise of crude oil in the international market
and serious drought in production regions, the price of natural
rubber in April 2007 increased considerably, the average price
of natural rubber (SCR5) reached RMB2 2250/t, a rise of 7.7% over
that in March 2007.