In 2009, my country's petrochemical industry experienced a year full of variables, withstood the test of the financial crisis and entered the path of stabilization and recovery. Industry experts said that the worst of the Chinese market has passed. 2010 will be a transitional year for the petrochemical industry to recover and rejuvenate, from weak to strong, and it is expected to return to its pre-crisis level in 2012.

my country's petrochemical industry ushered in a steady recovery

According to Feng Shiliang, a senior analyst of the China Petroleum and Chemical Industry Association, 2009 was the most difficult year for the petroleum and chemical industry in the new century. The operation of the industry showed a trend of "V" and the industry's investment increased. 12.9%, and the total output value increased by 0.3% year-on-year. At the same time, import and export trade volume fell by 23.2% year-on-year, the price index of petrochemical products fell by 13.1%, sales revenue fell by 3.3%, and industry profits fell by 5.2%; major chemical products such as sulfur, sulfuric acid, methanol, caustic soda, PVC, urea, etc. The market price fell to its lowest point in recent years in 2009. In 2010, it is estimated that the total output value of the whole industry will increase by 13%-15%, the income from main business will increase by about 14%, the profit will increase by 8%-10%, the import and export trade volume will increase by about 15%, and the investment will increase by more than 15%. Product output will increase by about 10%. It is not difficult to see from the main economic indicator data given by him in the two years that the economic situation of the industry in 2010 was better than that in 2009, and my country's petroleum and chemical industries will usher in a steady recovery.

However, Shu Zhaoxia, chief expert of Sinopec Research Institute of Economics and Technology, believes that although domestic petrochemical product market demand will maintain a steady growth in 2010, the growth rate will be significantly lower than in 2009. According to her forecast, ethylene demand in 2010 will increase by 3.4% year-on-year; synthetic resin will increase by 6% year-on-year; synthetic rubber will increase by 8%. At the same time, most of the new production capacity in 2009 will be fully released in 2010, so the market supply will increase significantly. The domestic petrochemical market will have a higher price throughout the year than last year, but there is little room for gross profit to increase.

The petrochemical industry has entered a period of structural adjustment and industrial upgrading

According to the forecast of the International Monetary Fund, the world economy will grow by 3.9% in 2010. Among them, the economy of developed countries will grow by 3.9%, emerging markets and developing countries will grow by 6%, and the growth rate of China's economy will reach 10%. In the medium and long term, the growth of domestic demand will become the dominant force driving the development of the industry.

Feng Shiliang said that my country's petroleum and chemical industries have entered a period of rapid development characterized by structural adjustment and industrial upgrading. The most solid support comes from downstream industries, which are expected to continue to drive demand growth in the petrochemical industry. It is estimated that in 2010, my country's automobile production will increase by about 10% to 15 million vehicles. The total output value of the light industry is expected to maintain a growth trend on the basis of a 13.5% increase in the previous year. The textile industry market is expected to continue the trend of 9.7% growth in the total output value of the previous year. The building materials industry will grow by about 20%, and the apparent consumption of refined oil will also grow by 5% to 6%.

In the first two months of this year, the petrochemical market continued to develop in a positive direction, with major economic indicators rebounding across the board. Among them, the price of refined oil is stable and the inventory is sufficient; the market for basic chemical raw materials continues to rebound; the market for synthetic materials maintains a recovery; international crude oil prices continue to run at a high level.

The external environment of the petrochemical industry is still full of tests

However, for chemical companies that have just broken free from market difficulties, they should also realize that the external environment facing the industry this year is unlikely to improve significantly while taking a breather. Feng Shiliang said that in 2010, the world economy will be in a process of slow recovery, and overall it has not yet come out of the downturn. The growth of demand for energy and chemical products in various countries is limited, and the global petrochemical market will still be oversupply in general. Therefore, the export resistance of my country's petrochemical products is still great, and international trade protectionism may continue to strengthen.

In terms of demand, my country’s domestic demand is expected to grow steadily in 2010, and exports will also recover. However, the role of economic stimulus policies will weaken. The regulatory policies in downstream real estate, finance and other fields will also make the market outlook face uncertain. The sustainability of the market recovery is in doubt. In terms of supply, the new capacity in 2009 will be fully released, and a large number of new capacity will also be put into production in 2010. If the start-up status of new devices and the shutdown of European and American devices are relatively stable, the market supply this year will increase significantly.

Encouraged by national policies, the upstream refining, ethylene and other production capacity continue to expand, which can improve the future shortage of energy and petrochemical products, but it will also intensify competition in the domestic market in the future. In addition, the downstream chemical industry also has risks: the cost advantage of basic chemicals in the Middle East will have a certain impact on the Chinese market; the tightening of environmental protection policies will restrict some industries, and the export tax rebate policy does not significantly promote the industry.

------Source "China Chlor-Alkali Net"