According to the China Petroleum and Chemical Industry Association, the output of China's petrochemical sector is expected to grow in the second half of the year, though at a slightly slower pace than previous months. While overall price increases have flattened, synthetic resin prices continue to rise sharply, while most other products show mixed performance. Prices for chemical fertilizers and rubber additives have generally declined.
Feng Shiliang, deputy secretary-general of the association, noted that new production capacities are driving growth in several key areas, including urea, tires, two alkalis, calcium carbide, coatings, and synthetic materials. In August, 65 major petrochemical products were tracked, with 54 showing growth, accounting for 83.1% of total output. Among them, 33 products saw more than 10% growth, representing 50.8% of the total.
Oil and gas production remained stable, though crude oil processing saw a slight increase, while major petroleum product output fell due to reduced refinery activity at CNPC. The fertilizer market remained weak, with nitrogen, phosphate, and compound fertilizer prices declining. Despite this, urea production rose by 11.9%, driven by new capacity expansion, and pesticide output surged by 33% year-on-year.
Concentrated nitric acid and hydrochloric acid production grew steadily, but sulfuric acid output dropped due to weak demand. Meanwhile, two-alkali production continued to rise as downstream demand increased. Caustic soda output reached 1.254 million tons in August, up 18.1% year-on-year. Although the calcium carbide industry faces macroeconomic controls, its growth remains strong.
Ethylene and pure benzene output slowed slightly, increasing by 6.4% and 6.1% respectively in August. Refined methanol and acetic acid, however, maintained steady growth. Synthetic materials, including resins, rubber, and fibers, continued to expand rapidly. PVC output hit a record high of 695,000 tons, up 19.4%, while polyethylene and polypropylene also saw significant gains.
Petrochemical prices have slowed their upward trend. Out of 155 tracked products in August, 68 saw price increases (43.9%), and 63 fell (40.6%). Organic raw materials and synthetic resins remained the main drivers of price hikes. Inorganic chemical markets, however, remain sluggish, with prices stagnating due to weak demand. Liquid chlorine prices dropped sharply by 10.3% month-on-month, while hydrochloric acid prices fell 2.1% in August.
The drop in liquid chlorine prices forced some manufacturers to boost hydrochloric acid production, but low downstream demand kept shipments sluggish. Chlor-alkali companies raised caustic soda prices to offset losses from liquid chlorine, while drought conditions in the southwest also contributed to higher caustic soda prices. PVC production via calcium carbide also led to a sharp rise in calcium carbide prices, reaching 2,530 yuan/ton in August.
Organic chemical prices fluctuated with oil price volatility. Propylene, butadiene, and xylene all saw price increases, while PTA prices rose due to higher PX and polyester costs. Ethylene glycol remained relatively stable, while butanol prices surged 11.6% due to lower domestic equipment utilization.
Fertilizer prices declined across the board, with nitrogen, phosphate, and compound fertilizers falling. Synthetic resin prices continued to climb, with general-purpose resins rising overall. Natural rubber prices dropped 4.3% month-on-month, while synthetic rubber markets showed mixed results, with SBR up 26.3% year-on-year and nitrile rubber down 18.7%.
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