Taiwan’s output of petrochemical products dipped 8.1 percent last quarter from a year ago to NT$457.81 billion (US$15.33 billion) because of falling product prices, latest industrial data shows.
Last quarter’s production output compared with NT$498.31 billion in the same period a year ago and NT$442.36 billion the previous quarter, according to a joint report by the Industry and Technology Intelligence Services (ITIS) and the Industrial Economics and Knowledge Research Center (IEK).
RISE AND FALL
“The market demand rose significantly earlier this year, but declined sharply after the Lunar New Year holiday, dragging down product prices,” IEK analyst Fan Zhen-cheng (范振誠) said in the report released on Wednesday.
EUROZONE FALOUT
Fan said that the decline could be attributed in part to a weak global economy resulting from the continuing European debt crisis.
In March, international crude oil prices fell to US$109 per barrel from US$116 recorded in February, while ethylene prices in March dropped 5.5 percent from a month earlier to US$1,359 per tonne, and butadiene prices fell more than 28 percent to US$1,474 per tonne, it said.
Fan said product prices also fell last quarter because of rising production in China, which caused a supply glut.
About 70 percent of petrochemical products manufactured in Taiwan were shipped to China, he said.
Fan said that in the second quarter, the production value of the local petrochemical sector is expected to rise only 1.2 percent from the first quarter to NT$463.5 billion.
BRIGHT PROSPECTS
However, business could pick up in the second half of this year because the global economy is expected to improve later this year, he said.
Output of the local petrochemical industry could receive a boost, with CPC Corp, Taiwan (中油) set to add new production capacity to its naphtha cracking facilities in the second half of the year, he said.
This year as a whole, Taiwan’s total output of petrochemical products is forecast to increase 3.8 percent to NT$1.87 trillion, the report said.
GREEN ENERGY
Separately, Taiwan’s green energy sector production value of equipment, components and parts expanded in the first quarter of the year on the back of the improving solar energy industry, the ITIS said in a separate report.
Green energy production value totaled NT$25.43 billion (US$849.11 million) last quarter, up 24.8 percent from the previous quarter. The figure contracted 8 percent from a year ago due to a high baseline, the researcher said.
Analysts attributed the upward trend to stabilizing prices of solar energy products and the withdrawal from the local market of major European solar energy companies.
The production value of Taiwan’s solar energy products for the first three months of the year jumped 27.5 percent quarter-on-quarter to NT$22.78 billion, the report said.
Solar energy industry production value of equipment, components and parts accounted for nearly 90 percent of the total green energy sector in the first quarter, with a 7.4 percent share for wind energy and 3 percent for biofuels.
First-quarter production value of the country’s wind energy and biofuels reached NT$1.89 billion and NT$760 million, up 4.4 percent and 8.6 percent respectively, the report said.
The report forecast that Taiwan’s green energy sector total production value of equipment, components and parts will expand 2.1 percent year-on-year to NT$106.98 billion, with those in the solar energy, wind energy and biofuel industries rising 1.5 percent, 11.3 percent and 0.1 percent respectively.
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