Something might be amiss in the East. New data shows that Chinese petrochem demand fell month-on-month in July for the first time this year.
China Daily: “Weak demand is the main reason for the slowdown in the industry, while there still exists overcapacity in some sectors like fertilizers,” CPCIA said. In July, the total revenue of the petrochemical industry stood at 571.4 billion yuan, down 3.7 per cent from June, said the report.
China approved a stimulus package for the country’s petrochemical industry on Feb 19. The country will speed up construction of some large-scale oil refining and ethylene projects as part of the package.
Maybe even stimulus-built capacity can’t create demand out of thin air.
As a related issue, China research and news firm Caijing also expects a slowdown in petroleum for the rest of the year due to inventory build-up and weak demand. For a country accustomed to growth as the norm, this data will be something to keep tabs on, especially since it is happening despite government stimulus for the industry. Hopefully August won’t be a repeat.
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