On November 2nd, a reporter learned from the Hubei Provincial Economic Commission that during the first 11 months of 2007, the petrochemical industry in Hubei continued to show strong performance. Despite rising production costs, the sector saw a significant improvement in economic efficiency. The oil refining industry experienced a turnaround, while the chemical industry maintained steady growth, with profits increasing at an impressive rate.
According to official data, the province’s oil processing industry generated a total of 36.55 billion yuan in main business revenue, marking a 9% year-on-year increase. It also reported a profit of 2 billion yuan, reversing a loss of 2.21 billion yuan in the same period the previous year. Since the third quarter, the industry has ensured a stable supply of refined oil products, with crude oil processing volumes steadily rising. As a result, the previously tight supply situation has eased.
Meanwhile, the chemical industry saw a slight rise in the prices of major products, and the fine chemical sector grew rapidly, contributing to sustained profit growth. The province’s chemical industry achieved a main business revenue of 60.22 billion yuan, up 33.4% compared to the previous year, and a profit of 2.84 billion yuan, reflecting a 76.4% increase. This was 12.2 percentage points higher than the provincial average and 32 percentage points above the previous year’s level.
Among the 60 key enterprises monitored by the province, main business revenue rose by 26.3%, profits increased by 67.7%, and tax revenue climbed by 32.4%. Notably, companies like Jingmen Petrochemical and Wuhan Petrochemical each recorded main business income exceeding 10 billion yuan. Yihua Group, on the other hand, achieved a profit of 640 million yuan, a 38.7% increase from the previous year.
However, the provincial Economic Commission also pointed out that rising production costs remained a major challenge for the industry. During the first 11 months of 2007, fuel and power prices in the province increased by 4.31%, far outpacing the 0.61% rise in ex-factory prices of industrial goods. In addition, international crude oil prices surged throughout the year, reaching record highs. For example, the average price in September, October, and November reached 10.3, 20.5, and 32.5 U.S. dollars per barrel, respectively.
This led to a decline in the profitability of the crude oil refining sector. Profits fell from 9.8 billion yuan in May to just 360 million yuan in August, and further dropped to 20 million yuan by November. Although the National Development and Reform Commission raised the export price of refined oil on November 1st, the international crude oil price remained higher than the local ex-factory price, resulting in an inverted pricing structure that persisted.
In response, the provincial Economic Commission urged petrochemical companies to focus on improving efficiency, addressing factors affecting profit growth, maintaining steady development, and exploring new growth areas. They also emphasized the need to accelerate product structure adjustments and ensure the production of marketable goods.
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