In 2006, with the constant improvement of Chinese macro economy, chemical industry started to revive. Production of main products grew steadily; prices of most products stayed stable; production and sales interconnected smoothly; imports and exports prospered; economic benefits of the industry were enhanced obviously.

The year 2006 saw production growth of most chemical products. Total value of industrial output remained relatively high-ranking the whole year, which was 2.05 trillion Yuan, up 25.71% over the previous year.

Driven by domestic economy especially by active exports, market needs of chemical industry heaved apparently. Prices of main products stayed high while sales kept running well. In 2006, chemical industry realized products sales income of 2.01 trillion Yuan, up 25.76% over the previous year.

Chemical industry entered an age when profits grew at a high speed because international price of crude oil drop and domestic chemical market was strong. The year 2006 witnessed that chemical industry totally achieved profits of 112.5 billion Yuan, up 18.27% over the previous year. The growth rate set a new record.

Although the industry performed well as a whole, economic profits of some sub industries slid down to some extent in 2006. First of all, profit growth rate of fertilizer industry tended to be stabilized. The relationship between supply and demand that had once been in the market was broken up, due to new added production, in addition with the adjustment of tax on exports policies, which resulted in the fact that since 2006 profit growth rate of fertilizer industry has been decelerated. In 2006, fertilizer industry totally gained profits of 18.3 billion Yuan. The growth rate tended to be stable and to be kept from dropping. Second, base chemicals profits grew rapidly. From this year on, driven by the prosperity of textile and garment industry, chemical fiber industry and construction industry, profits of base chemicals have increased month by month, with accelerating growth speed. In 2006, raw material manufacturing of base chemicals achieved total profits of 24 billion Yuan,, up 33.08% over the previous year. However, on contrast with the whole 11 months, profit growth rate slid down on a large margin. In the end, profit growth rate of pesticide manufacturing industry slowed down. From September, although it has sustained at a high level, it has yet started to decrease month by month. In 2006, pesticide manufacturing industry achieved total profits of 4.16 billion Yuan, up 44.9% over the previous year. The growth rate kept dropping compared to the former 11 months.

As for imports and exports, under the circumstance of active international trade, imports and exports of Chinese chemical industry have grown steadily from the year 2006. Growth of exports was even stronger, while that of imports slowed down. Imports of Chinese agricultural chemicals drop obviously because domestic resources were increased and relationship between supply and demand changed. In 2006, China totally imported 11.29 million ton fertilizer, down 19.2% over the previous year. As a part, 3.43 million ton chemical fertilizer was imported, down 16.5% over the previous year. Among chemical products, only did imports of potassium sulfate grow compared with the previous year, which were total 250 thousand ton, up 30.1% over the previous year.

Currently domestic chemical market has a big gap between supply and demand when it comes to some organic chemicals such as ethylene glycol and PTA. Imports of ethylene glycol were 4.062 million ton on aggregate, up 1.6% over the previous year. Those of terephthalate were 7.004 million ton, up 7.8% over the previous year.

1.8 million ton plastics in primary forms were imported, down 0.8% over the previous year. As a part, imports of polyethylene were 3.352 million ton in total, down 5.7% over the previous year. Those of polypropylene and polystyrene were 2.944 million ton and 3.62 million ton on aggregate respectively, down 2.5% and 1.4% over the previous year.

Currently due to the price imports of polyester products are growing rapidly. In 2006, imports of ABS in total were 2.018 million ton, up 1.6% over the previous year. Those of polyester products and PET flakes were 1.533 million ton and 193 thousand ton respectively, up 19.8% and 48.9% over the previous year.

With the decrement of international crude oil price, some organic chemicals prices that had been high started to roll down, whereas prices of synthetic resin and synthetic rubber products drop. Domestic chemical market basically demonstrated the situation of vibrantly adjusting, which was represented by the facts that prices of organic chemicals were decreased to some extent under the situation, and that many benzene and mellow products cut their prices. However, prices of chemical fertilizer tended to be stabilized, while synthetic resin still cut down its margin.

In brief, the year 2006 witnessed an adjusting but growing chemical market. Compared with the previous year, the growth of the whole year average prices was a little higher than the loss.