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China's economy in 2012 to be the slowest in eight years

May 22/2012
(Reuters) -- China's consumption of plastic could grow by up to 7% in 2012 after stalling in 2011, but the rebound will not be enough to melt a regional supply glut that will curb the output of plastic manufacturers and pressure the petrochemical market.

Weak traditional export markets and Bejing's steps to cool economic growth are still hitting sales. As a result, Asian plastic exporters face possibility of scaling back production further this year, in turn cutting demand for naphtha.
China's consumption of plastic by Asia's top importer growing around 5-7%, up on last year's flat growth but well down on the double-digit growth in 2009-2010.

Higher oil prices with Brent crude averaging USD118.21 a barrel this year, up 6.6% from 2011's USD110.91, are also squeezing margins, which could push plastic makers to cut runs, hitting demand for the raw material ethylene made from naphtha. Several processors are going buying need based and keeping inventories low. If raw material costs get too high, people would stop buying.

China has forecast its economy will grow 7.5% in 2012, the slowest in eight years, with exports crimped to traditional customers such as Europe and the United States.
Author:Anna Larionova
Tags:PP, PS, PVC, oil.
Category:General News
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