PetroChina's chemical profit leaps on stronger market, restructuring
PetroChina says its chemical business achieved a huge increase in 2016 operating profit, to 11.5 billion renminbi ($1.7 billion), from 193 million renminbi in 2015. The improvement reflects better market conditions, restructuring, and increased sales of high-margin products, PetroChina says. Net profit, sales and quarterly results for the chemical business have not been disclosed. The revenue of PetroChina's combined refining and chemical segment decreased 9.3% in 2016, to 582.5 billion renminbi, on falling prices for certain petroleum and chemical products, the company says. Average prices for polyethylene in China decreased 2.7% in 2016, to 7,981 renminbi/metric ton, the company adds.
PetroChina's chemical production increased 3.6% in 2016, with ethylene output rising 11.1%, to 5.6 million metric tons (MMt). The company's output of polymers increased 10.5%, to 9.1 MMt, production of fibers grew 4.6%, to 1.4 MMt, and output of synthetic rubber increased 6.6%, to 760,000 metric tons. However, urea production dropped 20.6%, to 1.9 MMt.
"In 2016, the domestic demand for chemical products grew at a steady rate while there were relatively less import sources and most domestic chemical enterprises were under intensive maintenance, which resulted in booming demand and supply in the chemical market," PetroChina says. "As the crude oil price continued to fluctuate at a low level, the profitability and competitiveness of petrochemical enterprises were enhanced."
Capital expenditure in PetroChina's refining and chemical segment was 12.8 billion renminbi in 2016 and was partly for the Yunnan Petrochemical world-scale refinery project at Kunming, China. The refinery, with a capacity of more than 10 MMt/y, is preparing to start up, PetroChina says.