zhu fang, deputy director of the information and marketing department of china petroleum and chemical industry association, said on march 18 that japan’s earthquake will have an impact on its imports of china’s petrochemicals, and further nudge up the price of ethylene and other downstream chemical products in the asia-pacific region. the influence will at least last for 2-3 months, but is very small on exports.
zhu fang said according to the current understanding of the situation, two major influences of the earthquake cannot be ignored: first, demand for oil in japan will fall, and so will the supplies of petrochemicals, which undermines japan’s contributions to the asia-pacific region; second, the decline in the supply of china’s needed high-end and high-added-value petrochemicals and of those bulk raw materials greatly is likely to induce a hike in the price.
judging from the imports and exports of the petroleum and chemical industry, japan is china’s third largest trading partner, and in recent years china has maintained a large trade deficit to japan, which continues today. in 2010, the total import-export value of china’s petrochemical products to japan totaled 35.62 billion u.s. dollars, of which import value from japan amounted to 26.08 billion u.s. dollars, coming in third place; the export value stood at 9.54 billion u.s. dollars, coming in second place. china not only relies on bulk products from japan, such as ethylene glycol, pta (purified terephthalic acid), polyethylene, polypropylene, but also on many other high-end products such as engineering plastics and modified resin. its main exports to japan are a few primary chemicals.
zhu fang said japan’s petrochemical enterprises have always kept their stocks low, and therefore the earthquake could tighten the supply of ethylene, which could further disrupt many bulk chemicals based on ethylene as a raw material. the downstream industry will be affected as well.
zhu pointed out there are many factors involved in japan’s quake’s influence on the global petrochemicals market. as of now, the facilities remain basically in good working order, but the power supply is unstable. there would be some uncertainties in the petrochemicals market within 2-3 months considering all the work that has to be done to restore the power system and to reassess the plants and equipment.
facilities at ports also have to some degree been affected by the quake and tsunami, so the import-export will also be constricted.
