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The first quarter oil and chemical inflation risk increased

On April 18, a reporter learned from the China Petroleum and Chemical Industry Association that in the first quarter of this year, prices of 162 key products monitored by the industry have seen a significant upward trend, with some experiencing sharp increases. According to data from the General Administration of Customs, imports of major petrochemical products such as crude oil, refined oil, pesticides, natural rubber, synthetic rubber, and fertilizers showed an overall increase in both volume and value, reflecting a strong upward trend in trade activity. As a result, domestic and international market prices for petrochemical products have continued to rise, placing the entire industry under growing inflationary pressure. On April 16, Li Xiaochao, Director of the National Statistics Division at the National Bureau of Statistics, reported that the consumer price index (CPI) rose by 8% year-on-year in the first quarter, up from 5.3% in the same period last year. This follows a sharp increase in global commodity prices last year, which has now turned into a sustained growth trend. The surge in raw material prices, particularly crude oil and coal, has pushed several industries, including oil refining, from profitability to losses, while profits across many other sectors have also declined sharply. According to the latest customs statistics, crude oil imports in the first quarter increased by 14.9% year-on-year in volume, but the total value surged by 90.6%. Refined oil imports rose by 13.8% in volume, with a corresponding 82.8% increase in value. Pesticide imports grew by 2.7% in volume, but the value climbed 16.2%. Natural rubber imports jumped 30.8% in volume, with a 79.8% rise in value, while synthetic rubber imports increased by 3.8%, and the value rose 28.7%. Fertilizer imports, however, fell by 36.4% in volume, though the value only decreased by 8.7%. The China Petroleum and Chemical Industry Association also reported that petrochemical product prices generally rose in the first quarter. Of the 162 key products tracked, 113 saw a year-on-year increase in March prices, accounting for about two-thirds of the total, or 69.75%. Among them, the price of butyl rubber and sulfuric acid rose more than twice compared to the same period last year, while sulfur prices increased by over 2.5 times year-on-year. According to an official from the China Petroleum and Chemical Industry Association, the ongoing price hikes are creating mounting challenges for the chemical industry. On one hand, the persistent rise in energy and raw material costs is pushing up the prices of chemical products. On the other hand, downstream enterprises have limited capacity to absorb these cost increases, leading to a difficult situation where cost pressures are rising and the ability to pass on costs is shrinking. To cope, the association recommends that chemical companies focus on reducing raw material and energy consumption, lowering production costs, and enhancing their competitiveness in the market. (Reporter: Qian Min)

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