Sinopec forecasts slowdown in demand for petrochemicals

Oct. 31, 2008 (China Knowledge) - China Petroleum and Chemical Corp (Sinopec)<600028><386><SNP>, the country's largest petrochemical producer, sees slowdown in demand for chemical products next year due to the global economic recession, the South China Morning Post reported on Friday.

Dai Houliang, CFO with Sinopec, said he believes petrochemicals demand will still rise next year fuelled by the central government's policies to stimulate domestic consumption, but the growth rate will be probably lower than that of the previous years, as it is closely related to international and domestic growth.

The petrochemical producer booked an operating loss for the third quarter in its chemicals business, partly because of a one-month time lag in the booking of the cost of crude oil and the ultimate raw material in petrochemicals production, according to Dai. However, he didn't reveal any specific figures on the loss.

The company also set aside a one-off asset impairment charge of RMB 600 million.

Sinopec on Wednesday posted net profit of RMB 8.2 billion for the third quarter, representing a decline of 39% year-on-year, citing Chinese accounting standards.