Production Rose with Lower Prices

By Feng Shiliang of CPCIA   

In July 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 56 types increased
compared with the same period of 2006, and the output of 41types,
in particular, grew by over 10%. The output of roll film,
bactericide, polyvinyl alcohol fiber and petroleum bitumen
declined by over 10%. In particular the decrease rate of roll
film reached as high as 70.36%, impacted by digit camera. China's
chemical market showed stable and down trend. Among 151
chemicals recorded, 69 chemicals had lower price than in the
preceding month.

Production

In July 2007, crude oil output had a drop of 1.7% and the growth
rate of natural gas output reached 16.4%.
   Due to the oversupply in domestic market, urea production
slowed down with a yearly growth of 6.4%, comparing with 10.2%
in June 2007. The output of herbicide increased by 15.6%, while
the bactericide production declined by 42.3%.
    The output of pure benzene and methanol rose by 40.1% and
42.3% respectively compared with the same period of 2006 due to
the brisk demand. Resins continued high growth. The output of
cis-1,4-polybutadiene rubber decreased by 26.3%, impacted by
other substitutive rubbers.  

Prices

In July 2007, due to the price rise of sulfur in domestic market,
the average price of sulfuric acid reached RMB550/t, a rise of
3.8% over that in June 2007.
   Due to the demand shrink in downstream sectors, the average
prices of caustic soda (liquid) was RMB560/t, a drop of 8.2% from
a month ago, while the average prices of soda ash rose 1.2% to
RMB1 630/t, in response to supply deficit.
   Organic materials showed different price change according to
strong or slack demand. The prices of aromatic products
including toluene, pure benzene and xylene went up, while the
alcohol products such as methanol, ethanol, isopropanol and
n-butanol came down. In July 2007, due to the oversupply and
slack demand in downstream formaldehyde sector, the average
prices of methanol dropped 2.7% to RMB2 500/t.
   Due to the oversupply in domestic market, the average prices
of urea continued to decrease to RMB1 770/t, a drop of 1.1% from
June 2007. The average prices of diammonium phosphate rose in
response to the increase of production cost caused by
considerable price rise of sulfur.
   In July 2007, due to the supply increase, the price of natural
rubber continued to decrease, the average price of natural
rubber (SCR5) was RMB18 400/t, a drop of 1.3% from that in June
2007. The prices of synthetic rubbers including
styrene-butadiene rubber and cis-1, 4-polybutadiene rubber
increased compared with the preceding month.