China's chemical market may continue to exceed supply in 2012

According to relevant statistics, as of January 8, 2012, 76 chemical listed companies in China’s chemical industry have announced the 2011 annual pre-commercial announcement, which is one of the industries with the largest number of listed companies’ pre-increase in performance in 2011. The annual growth of Zhonghua Chang Chemical and other companies exceeds 100%.

Zhong Yanzhi, a research fellow of China Investment Advisor Chemical Industry, pointed out that although the European debt crisis and other factors have affected the demand for chemical products since the third quarter of 2011, China's chemical industry has shown a state of prosperous peak season, but due to the first half of the international crude oil and domestic The increase in coal prices has driven the rise in petrochemical products. Looking at the overall situation, the profitability of China's chemical industry in 2011 remained good, and the number of chemical company listed companies had a large increase in performance.

However, although the overall profitability of the domestic chemical industry in 2011 has been positive, but due to the current investment growth trend in the domestic chemical industry is still obvious, and the growth in demand for chemical products is limited, it is expected that in 2012 the domestic chemical industry may face oversupply. The problem is that the profitability of related chemical companies may decline.

Chang Yuzhi also pointed out that the capacity expansion of the domestic chemical industry in 2011 is still fast, and new projects in the chemical sub-sectors are still more. According to relevant statistics, in the first three quarters of 2011, China's oil and chemical industry fixed-plan assets and new projects have achieved double-digit growth. Among them, China's petroleum and chemical industry fixed plan assets increased by 17.6% year-on-year, and the number of newly started projects increased by 19.0% year-on-year.

In terms of demand for chemical products, due to factors such as severe inflation and tightening of real estate control policies, domestic chemical product demand growth has been limited; at the same time, factors such as monetary policy tightening have also made the capital chain of domestic related chemical companies more tense. It also further reduced the demand for chemical products. In addition, the spread of the European debt crisis has slowed down the growth in demand for international chemical products, which has led to a reduction in the export demand for chemical products in China, which will, to some extent, reduce the demand for domestic chemical products.

The "Investment Analysis and Prospect Forecast Report of China's Petrochemical Industry for 2011-2015" issued by China Investment Advisors shows that after more than 30 years of efforts, the petroleum and chemical industries in China have developed rapidly and the import and export trade is also very active. At present, most of China's basic petrochemical products have already achieved exports, and the dependence on exports is relatively high. For example, pesticides, fertilizers, basic chemical raw materials and some plastics, rubber and related products.