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China Petrochemicals Industry Update Quarter 2 2012

China Petrochemicals Industry Update Quarter 2 2012

$ 1 088 - March 2013 - by Business Monitor International - 83

Summary

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Data Series

Industry

Petrochemical

Country

China

Keywords

Ethylene

Includes 3 FREE quarterly updates

BMI View: While growth in the Chinese petrochemicals market will be sustained, profits will continue to be
squeezed by a combination of rising input costs, weakening downstream markets and surplus capacity.
Ethylene capacity is continuing to surge even as ethylene output stagnates, leading to low capacity
utilisation and a decline in net imports. This situation will persist over the medium-term even as
downstream polymers capacities grow.

The overall value of Chinese petrochemical output grew 12.9% to CNY10.86trn in 2012, but this was not
enough to avert a decline in profits due to poor demand. Output registered month-on-month (m-o-m)
declines throughout H112 before rebounding in H212 due to government stimulus. Nevertheless,
profitability plunged 9.4% to CNY324.9bn in the January-November period and estimates suggest that the
full-year decline could be as much as 10%. The decline in the petrochemicals industry comes amid GDP
growth of 7.8%, the slowest rate of growth since 1999. BMI estimates that ethylene output declined by
2.2% year-on-year (y-o-y) to 14.9mn tonnes in 2012, in spite of 20% growth in cracker capacity to 21.56mn
tonnes. With consumption growth of just 4% (to 32.5mn tonnes), the country's ethylene deficit was slashed
by 18% to 10.94mn tonnes. Two factors were behind the slowdown in the petrochemicals market: the
effects of the economic stimulus package of 2008-2010, which led to a surge in production and excessive
purchasing, leading to massive inventories; and the decline in industrial activity resulting from a slowdown
in export trade.

BMI Industry View . 7
SWOT . 9
Political 11
Economic 12
Business Environment 14
Industry Forecast 15
Table: China's Petrochemicals Sector, 2010-2017 ('000 tpa, unless otherwise stated), 2010-2017 . . 18
Macroeconomic Forecasts . 20
The Recovery Is On… . 21
…But Major Headwinds Blow 22
2012 Was Only A Warning Shot 23
Risks Are Weighted To The Downside 24
Table: China - Economic Activity . . . . . . 25
Industry Risk/Reward Ratings . 26
Asia Petrochemicals Risk/Reward Ratings 26
Table: Asia Petrochemicals Risk/Reward Ratings . . . . . . 29
Industry Risk Reward Ratings 29
Market Overview . 31
Industry Trends And Developments 33
Upstream . 33
Table: Refineries In China With Over 200,000b/d Capacity . . . 33
Sinopec 34
PetroChina . 36
CNOOC . 37
Aromatics And Derivatives . 38
Coal-Based Chemicals . 39
Other Projects 41
Regulatory Developments . 43
Company Profile 46
China Petroleum & Chemical Corporation (Sinopec) . 46
PetroChina 50
Regional Overview 55
Asia Overview 55
Industrial Developments 55
China And India Continue To Dominate . 56
India Has Significant Untapped Potential . 56
Global Industry Overview 59
Global Petrochemicals Overview 59
Change In Feedstock, But Not In Market Cycle 60
Polymers Heading On Different Trajectories . 62
Global Oil Products Price Outlook . 62
Table: BMI's Oil Price Forecasts, Average Price (US$/bbl) . . . 63
Table: BMI's Refined Products Forecasts . . . . . . 63
Refiners: Is The Party Over? 66
Jet Fuel: Middle East & Africa Remain Positive As Global Air Traffic Slumps . 69
Table: Total Air Freight & Passenger Volumes 71
Gasoline And Diesel: Demand Destruction Takes A Toll 71
Naphtha: Asia Stays Afloat While Europe Sinks . 72
Bunker Fuels: Trans-Pacific Route Rebound Amid High Prices . 72
Demographic Forecast . 75
Table: China's Population By Age Group, 1990-2020 ('000) . . 76
Table: China's Population By Age Group, 1990-2020 (% of total) . . . . 77
Table: China's Key Population Ratios, 1990-2020 . . . . . 78
Table: China's Rural And Urban Population, 1990-2020 . . . . . . 78
Glossary . 79
Table: Glossary of Petrochemicals Terms . . . . . . 79
Methodology 80
Chemicals And Petrochemicals Industry . 80
Cross Checks . 81
Risk/Reward Ratings . 81
Table: Petrochemicals Risk/Reward Indicators And Rationale 82
Weighting 83
Table: Weighting Of Indicators . 83

Petrochemical in China

China Acrylonitrile Butadiene Styrene Capacity, `000 Tonnes

$ 250
Industry data
February 2013

Yearly, From 2008 To 2017
By Business Monitor International
Source: Sinopec/BMI/companies

Industries : Petrochemical
Countries : China

China Ethylene Imports, `000 Tonnes

$ 250
Industry data
February 2013

Yearly, From 2008 To 2017
By Business Monitor International
Source: Sinopec/BMI/companies

Industries : Petrochemical
Countries : China

China Low Density Polyethylene Capacity, `000 Tonnes

$ 250
Industry data
February 2013

Yearly, From 2009 To 2017
By Business Monitor International
Source: Sinopec/BMI/companies

Industries : Petrochemical
Countries : China

China Ethylene Capacity, Tpa

$ 250
Industry data
February 2013

Yearly, From 2004 To 2017
By Business Monitor International
Source: Sinopec/BMI/companies

Industries : Petrochemical
Countries : China

China High Density Polyethylene Capacity, `000 Tonnes

$ 250
Industry data
February 2013

Yearly, From 2009 To 2017
By Business Monitor International
Source: Sinopec/BMI/companies

Industries : Petrochemical
Countries : China

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