Japan’s economy set to show 7 straight growth quarters

Japan’s quarter-on-quarter growth of 0.3 percent is expected after a revised 0.6 percent rise in the second quarter. (Reuters)
Updated 10 November 2017
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Japan’s economy set to show 7 straight growth quarters

TOKYO: Japan’s economy was expected have grown for a seventh straight quarter in July-September, a period of unbroken expansion last seen between 1999 and 2001, a Reuters poll found on Friday.
Gross domestic product (GDP) is expected to have grown at an annualized rate of 1.3 percent in the third quarter, the poll of 20 analysts showed.
That result would mark a seventh straight growth quarter, the longest period of expansion since an eight-quarter run from April-June 1999 to January-March 2001.
Quarter-on-quarter growth of 0.3 percent is expected after a revised 0.6 percent rise in the second quarter.
“Consumer spending was seen stalling in July-September but export growth likely supported solid economic expansion,” said Atsushi Takeda, chief economist at Itochu Economic Research Institute.
The poll found that private consumption, which accounts for roughly 60 percent of GDP, probably slipped 0.4 percent in the third quarter, the first fall in seven quarters.
External demand — or exports minus imports — was seen contributing 0.4 percentage point to growth, the poll found, after it subtracted 0.3 percentage point from GDP growth in April-June.
Capital spending was seen rising 0.3 percent in the third quarter, growing for a fourth straight quarter, following a 0.5 percent rise the previous quarter.
“We forecast the economy will continue to grow as both domestic and external demand pick up thanks to the global economic recovery and a softer yen,” said Hidenobu Tokuda, senior economist at Mizuho Research Institute.
“But there is downside risk from the Chinese economy and we also need to closely monitor geopolitical risk from the North Korean situation,” he said.
The Cabinet Office will announce the GDP data on November 15 at 850am.
The Bank of Japan’s corporate goods price index (CGPI), which measures the prices companies charge each other for goods and services, was seen likely to have risen an annual 3.1 percent in October, the poll found.
Such a result would mark a 10th straight rising month and the fastest annual rate of increase since October 2008, excluding the effect of a sales tax hike in 2014.
The central bank will release the CGPI data on November 13 at 850am Japan Time.


Sipchem tops bumper earnings from Saudi petrochemical majors

Updated 21 October 2018
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Sipchem tops bumper earnings from Saudi petrochemical majors

LONDON: Saudi petrochemical producer Sipchem said its third-quarter profits surged by about half to SR180.3 million ($47.9 million) amid a brace of strong earnings from the sector.
The company also known as Saudi International Petrochemical Co, plans to merge with Sahara Petrochemicals as a wave of consolidation sweeps through the industry.
CEO Ahmad Alohali told Al Arabiya that the company’s third quarter performance was encouraging. 
“Product prices varied,” he said. “Prices of nine of our products rose between 14 percent and 30 percent, as every product has its own dynamics. Production efficiency of Sipchem’s plant also improved.”
He also told the broadcaster that the ongoing US-China trade war could affect Sipchem, making it shift shipments from one market to another, he said.
Elsewhere, Yanbu National Petrochemical, also known as Yansab, overcame an increase in some of its feedstock costs to record a 13 percent jump in third quarter net profit to SR729 million compared to a year earlier.
It said the increase in profitability was down to higher average selling prices for most of its products.
Meanwhile, Saudi Kayan Petrochemical said net profit for the period rose by about 24 percent to SR471.9 million compared with a year earlier.

 

 An improvement in productivity at some of its plants helped to drive profits higher, it said in a filing.
Saudi petrochemical producers from SABIC to Sahara are seeking to boost output and efficiency while oil companies such as Saudi Aramco are also increasingly looking at crude to chemicals technology to tap into the changing industry demand drivers.
Petrochemicals are set to account for more than a third of the growth in world oil demand to 2030, and nearly half the growth to 2050, adding nearly 7 million barrels of oil a day by then, according to the International Energy Agency (IEA).
“Our economies are heavily dependent on petrochemicals, but the sector receives far less attention than it deserves,” said Fatih Birol, the IEA’s executive director.
“Petrochemicals are one of the key blind spots in the global energy debate, especially given the influence they will exert on future energy trends. In fact, our analysis shows they will have a greater influence on the future of oil demand than cars, trucks and aviation,” said Birol in a report earlier this month.
The Middle East remains the lowest‑cost center for many key petrochemicals.
Saudi Arabia and the wider Middle East are at the lower end of the cost curve among petrochemical-producing regions for primary chemical production.
Currently the region accounts for 12 percent of the global production of high-value chemicals, 9 percent of ammonia production and 15 percent of the methanol market.
In addition it also has huge growth potential with 90 percent of naphtha output currently exported instead of being used as petrochemical feedstock because of the ample availability of
natural gas.

FACTOID

12%

The Middle East accounts for about 12 percent of the global production of high-value chemicals.