November 2008 Economic Performance for China's Petroleum/Chemical Industry   

By Feng Shiliang, CPCIA   

The growth rate for gross production in China's petroleum and chemical industry is near zero in November 2008 as the financial crisis bit, an analysis of China Petroleum and Chemical Industry Association (CPCIA) has shown. In breakdown, the chemical sector and the oil and gas exploration and production sector saw rare drops. The gross production for the petroleum and chemical industry only rose 0.8%, 17.7 percentage points slower than the growth of October 2008 and the lowest in five years for the same period. That was 1.5% decline for chemical and 1.2% drop for oil and gas exploration and production. The industry is squeezed by waning exports and volatile market in November, with companies' operation keeping deteriorating.
   The whole industry's gross production totaled RMB484.25 billion in November 2008, up merely 0.8%. The growth is 28.1 percentage points slower than that of November 2007 and 17.7 percentage points slower than October 2008's. Chemical sector's gross production amounted to RMB259.99 billion, down 1.5% year-on-year, comparing with the 33.5% growth in November 2007 and 17.8% in October 2008.
    Gross production for oil and gas exploration and production combined RMB68 billion, down 1.2%, comparing with the 36.4% in November 2007 and 30.2% in October 2008.
   For refining, gross production rose 1.2% to RMB139.44 billion, 22.1 percentage points slower than November 2007 and 16.6 percentage points slower than October's.
   The performance for the special equipment manufacturing sector remained strong, with gross production surging 72.5% to RMB16.83 billion for November 2008.
   Output of petrochemical products slumped 70% in November 2008. Among the 69 key petrochemical products tracked by CPCIA, 48 or around 70%, saw output declines. The number was 41 in October 2008.
   The plunge in international crude oil prices is also increasing pressure on costs in the coal-based chemical sector, forcing production to continue to shrink. Also in November, China's methanol production fell, the first monthly annualized decline in recent years. Output plunged 17% month-on-month.
   Dimethyl ether sector is also in serious condition, with around 40.3% facilities being idled, 45.8% partial running and only 13.9% in normal operation based on a latest survey. Construction on new projects is significantly slowing down and some proposed projects had been delayed.
   However, the advanced materials sector and those products with high value added kept growing fast in the month, outshining others.