Sinopec faces difficult 2010
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Despite an improving global economy, China Petrochemical Corp, Asia's largest refiner, still faces challenges in 2010 as it will be hit by a double whammy of rising crude oil prices and sluggish retail prices due to an oversupply situation.
"Crude prices may be higher than this year due to factors including recovering demand, a weaker US dollar and speculation," said Su Shulin, president of China Petrochemical Corp, at the firm's year-end working conference yesterday.
Meanwhile, competition in the retail market will be fiercer after domestic refiners moved to raise production, which is seen to outpace growth in demand in 2010, Su said.
China processed a record 33.4 million tons of crude in November, a jump of 21 percent from a year earlier after new refining plants came into operation and some existing ones expanded.
"The refined oil could hardly be sold at a favorable price in consideration of the oversupply," said Su.
The domestic ethylene market will also be challenging in 2010 as the expected mild growth in demand lags the inventories level and production expansion.
The refiner, also known as Sinopec, which supplies about half of China's fuel market, expects total refined oil sales to hit a record 129 million tons this year, up 1.8 percent from 2008.
Zhang Jianhua, the vice president of the company, disclosed on Wednesday crude oil processing volume at Sinopec will exceed 200 million tons in 2010.
