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Asia petrochemical shares fall on concerns over China slowdown

March 22/2012
(news.szenergy) -- Shares of petrochemical companies in Asia were lower on Wednesday, in line with regional bourses, on concerns over demand amid a slowdown in China, the regions biggest importer of petrochemical products.

The NDRC [National Development and Reform Commission] raised fuel oil prices twice in two months. Market players are worried that increasing energy cost will weigh on Chinas economy further, said Wei Tao, an analyst at brokerage Xingye Securities.

Chinas demand for iron ores has also been softening, as indicated by major Australian miners BHP Billiton and Rio Tinto, and this is deemed as a strong indication that the countrys industrial growth is cooling down.

In the middle of last week, Asias monoethylene glycol (MEG) market was shaken by Chinas economic concerns, prompting traders with high inventory to offload heavy volumes into the market.

China Premier Wen Jiabao had said that the countrys property prices are still far from reasonable levels, indicating that current policies curbing demand will not be relaxed so soon.
Early this month, Chinas GDP growth target this year was cut to 7.5%, down from the 8% target that was kept for seven years.
Weakness in Chinas construction sector affects demand for various petrochemicals, including styrene monomer (SM), epoxy resins and polyvinyl chloride (PVC).

Author:Anna Larionova
Tags:PVC, MEG.
Category:General News
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