Banking on the stimulus measures introduced by the world’s leading economies, which are expected to enhance demand, Taiwan foresees its petrochemical output value for the fourth quarter (Q4) of current year to be 7.6 percent higher than its third quarter’s (Q3) output, a Government report stated.
The report by the Industry and Technology Intelligence Services (ITIS), a research institute under the Ministry of Economic Affairs, said the petrochemical sector’s output is expected to increase to NT$ 462.2 billion in Q4 compared to production worth NT$ 429.5 billion during the corresponding period last year, according to Taipei Times.
However, it noted that the sector’s overall output for 2012 is expected to decline 4.7 percent from 2011’s NT$ 1.92 trillion to NT$ 1.83 trillion, due to the ambiguity surrounding the global economy. The stimulus measures introduced by major economies, which are expected to drive Taiwan’s Q4 petrochemical output, include the US Federal Reserve’s third round of quantitative easing and China’s move of releasing funds in the market. According to ITIS, international crude oil prices are also likely to stabilize in Q4, which would allow petrochemical producers to generate more profits and encourage them to boost exports.
In addition, the enhanced propylene production by the state-run oil supplier would also contribute in boosting the country’s overall petrochemical output in the ongoing quarter, the report stated.
In spite of all this, ITIS foresees a drop in the country’s overall petrochemical output for current year, as factors like concerns over the eurozone debt crisis experienced during early part of the year and intensifying competition from emerging nations, impacted the Taiwanese industry. The institute noted that the negativities still persist, but are balanced by the stimulus measures, as of now.
The report stated that partial suspension of production by CPC Corp and the Formosa Plastics Group for annual maintenance resulted in a 4.1 percent quarter-on-quarter decline in the petrochemical sector’s Q3 output.
