Sinopec to cut chemical output, boost fuel production
4 June 2008
Oil refiner China Petroleum and Chemical Corp (Sinopec) plans to cut output of key base chemicals this month in order to raise fuel production during the peak summer season, the South China Morning Post reported. Sinopec will reduce ethylene output capacity by 65,000 tons, or 11%, and olefin by 8% this month. Ethylene and olefin are used in manufacturing industries such as textiles and packaging, and both chemicals are more profitable than fuel production as their prices are not controlled by the government. Analysts told the paper that the move would worsen Sinopec's losses, although the impact would be small. Sinopec's strategy, which was also used last year, is expected to raise fuel supplies by 200,000 tons in June.