China's Sinopec sees loss in Aug from chemical business - Xinhua

BEIJING, Sep 02, 2008 (XFN-ASIA via COMTEX) -- SNP | Quote | Chart | News | PowerRating -- China Petroleum & Chemical Corp (Sinopec) (SHA 600028; HK 0386; NYSE SNP | Quote | Chart | News | PowerRating) is expecting a loss in August from the chemical business, mainly due to soaring naphtha prices and intense competition, the official Xinhua news agency reported.

Xinhua cited a source with Sinopec's parent Sinopec Group as saying that the listed company's chemical business was barely profitable in July and will book losses in August.

Last month, the price of naphtha, a raw material used in ethylene production, was over 1,200 usd per ton, more than doubling from the beginning of the year.

This led to a price increase for ethylene, but the hike does not fully cover higher costs, the report said.

Last week, the company's chairman Su Shulin said that the company is in the midst of its "most difficult year ever" amid losses in the refining business, with worse to come in the second half. The company projected net profit in the first nine months to decline by over 50 pct year-on-year.

A-shares of Sinopec closed down 0.26 pct at 9.96 yuan yesterday.

(1 usd = 6.85 yuan)

zachary.wei@xfn.com

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