China's oil and petrochemical industry posted a record high profit in the first half of this year, thanks to the oil price hike during the period and the global recovery of the chemical industry.

Analysts expect the growth of the oil industry to slow down in the second half of this year as the oil price slides. But the petrochemical sector has brushed aside the fallout of the SARS (severe acute respiratory syndrome) outbreak, and is expected to continue the recovery in the coming months.

According to the National Petroleum and Chemical Industry Association, the oil and chemical industry has notched up a profit of 89.7 billion yuan (US$10.8 billion) in the first six months of this year, increasing by 92 percent over the same period of last year.

The revenue rose 33.2 percent year-on-year to 848.7 billion yuan (US$102.6 billion).

Loss-making companies have also shrugged off losses by 17.4 percent year-on-year to 7.3 billion yuan (US$882.7 million).

Analysts said the oil price hike, which has surged by almost 40 percent over last year's level, has helped the sector secure windfalls, and helped it become the strongest force sustaining national economic growth during the period.

The chemical industry has also bottomed out in the past six months, although the SARS outbreak set back the recovery in April and May, they said.

"The sluggish performance of the chemical sector in the first quarter of last year has also exaggerated the growth," said an analyst with a Hong Kong-based foreign investment bank.

She said the chemical sector maintains a healthy outlook in the second half on the back of the cyclical recovery of the global chemical industry, and the strong demand in the market.

(China Daily August 1, 2003)