Chinese commodity chemicals

It will be critical for China s long term competitiveness in the global marketplace to ensure that these new plants are large-scale, world-class, and able to compete with the best competitor facilities. At the same time Chinese Commodities Chemicals producers will need to take the following tough measures ... 

Competition in Commodity Chemicals Sector. Domestic players in the Commodity Chemicals sector are not as competitive as North American or European players, particularly in the more complex downstream intermediates. The biggest players in the commodity chemicals market in Chitra are the three main oil and gas companies, China Natiotral Petroleum Corporation (CNPC), China Natiorral Petrochemical Corporation (Sinopec) and China National Offshore Oil Corporation (CNOOC), all of which are still prinrarily owned by the Chinese government. 

The margins are partly supported by a sustainable share of imports, allowing for import parity pricing. In 2003, approximately 21 percent of China s total chemicals consumption was covered by net imports, mainly commodities. For example, at least half of the consumption of synthetic rubber (69%), plastics (55%), and organic chemicals (50%) was met by net imports. Even at production growth forecasts of 9.6 percent p.a., Chinese capacity levels will not meet demand in the foreseeable future and the country is expected to remain a chemicals net importer beyond 2020. 

Most of this growth has concerned the growth of China and suppliers of commodity resins and chemical intermediates to the rapidly growing Chinese market. 

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