China Q2 Economic slowdown has Negative Impacts on PU Industry

Chemical News: China Q2 Economic slowdown has Negative Impacts on PU Industry

https://www.chemnet.com Jul 23,2010
Second-quarter growth of China’s economy fell to 10.3 percent from the first quarter's 11.9 percent as Beijing wound down its giant stimulus and cooled credit, data showed last Thursday. While economic growth slowed down, China’s PU industry also took bearish tone in the second quarter.

Demand at chemical market shrank obviously in recent months, mainly due to waning growth in major pillar industries like construction.

In the early time, some MEG producers already pointed out that demand for MEG had weakened ever since Lunar New Year in February. As yet, most MEG stockpiles in China were located in coastal area. Compared with the 10% growth rate of global output, demand growth rate at 6-7% would surely result in supply glut.

Meanwhile, TDI market also slumped on slow economic growth. At a time when supply over demand, Asian TDI contract price in June tumbled $350/ton compared with May.

Some economists predicted that economic growth in Q3 and Q4 would continue slowing down, while GDP growth rate might stand at 9.8% and 9.4% respectively. PU industry should prepare for potential further decline in economic growth.
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