China’s petroleum product production continues to rise; some concerns over growing
inventories
China’s crude oil import rose 18.2% m-m to 19.63mn tons in July. Meanwhile, gasoline
production rose 8.8% m-m to 6.4mn tons, diesel 7.7% m-m to 12.85mn tons, and heating
oil 4.2% m-m to 1.35mn tons. Gasoline, diesel, and heating oil exports fell 46.7%,
22.6%, and 22.6% m-m, respectively, while diesel and kerosene exports rose 12.5% and
20.7% m-m. Meanwhile, according to some Chinese press reports, petroleum product
inventories at Sinopec and PetroChina are continuing to rise, implying the companies
might decrease their inventories by lowering production or expanding exports.
China’s petrochemical product import growth slows or turns to decline
After several consecutive monthly increases, PX, EG, PTA, and TDI imports declined
12%, 6.2%, 5.1%, and 24.8% m-m, respectively, in July. Meanwhile, among synthetic
resins, PP, PS, and ABS imports rose 7.8%, 4.5%, and 3.6% m-m, respectively, although
growth rates slowed. And, PE imports declined 2.8% and PVC imports fell 21.5% m-m.
The production and import of raw materials for synthetic fiber fell 1.1% and 3.2% m-m
to 2.23mn and 1.19mn tons, respectively, implying utilization ratios at downstream
industries have slowed or inventories are high enough to meet demand.
Soaring fertilizer exports; caustic soda prices remain weak
China’s chemical fertilizer production remained flat or decreased m-m in July. However,
exports surged on: 1) improved price competitiveness thanks to off-season export tariff
rates; and 2) the sale of inventories to overseas markets. Meanwhile, caustic soda prices
have continued to fall, reaching the lowest price since 2006, due to oversupply.