Sinopec Yizheng Chemical Fibre expects bigger loss in 2013

HONG KONG Thu Jan 23, 2014 9:44am EST

HONG KONG Jan 23 (Reuters) - Sinopec Yizheng Chemical Fibre Co Ltd, a unit of Asia's largest refiner Sinopec Corp , expects losses to widen in 2013 as subdued global demand for polyester products pushed prices down sharply.

Yizheng, along with other Chinese chemical fibre producers such as Jilin Chemical Fibre and Jiangsu Huaxicun, have been suffering from sluggish polyester demand as economies at home and abroad slowed.

Yizheng expects its net loss for the year ended Dec. 31 to be 1.45 billion yuan ($239.6 million), larger than a year-ago loss of 361.4 million yuan, it said in filings to the Hong Kong and Shanghai bourses on Thursday.

Yizheng, China's main manufacturer of polyester, faces the prospect of being delisted from the Shanghai exchange if it continues to be in the red three years in a row.

"Owing to weakness in global economic recovery, insufficient market demand, and excessive polyester production capacity, the prices of polyester products declined significantly in 2013," the company, based in China's eastern province of Jiangsu, said.

Other chemical producers fared no better.

Earlier in January, Jilin Chemical Fibre Co Ltd said it expected to swing into the red in 2013 with a net loss of 335-425 million yuan, blaming the weak economy for sluggish demand for viscose fibre.

Last week, Jiangsu Huaxicun Co Ltd said it expected its net profit for 2013 to tumble as much as 72.6 percent to 38-48 million yuan.

"The fibre market is still in a downturn," Huaxicun said in a recent filing to the Shenzhen stock exchange.

Yizheng's announcement came after the market closed on Thursday.

Its Shanghai shares closed up 1.4 percent at 2.820 yuan, outperforming the main Shanghai composite index's 0.5 percent fall. Its Hong Kong shares ended down 0.6 percent at HK$1.58, beating the Hang Seng index's 1.5 percent loss. ($1 = 6.0513 Chinese yuan) (Reporting by Twinnie Siu and Meg Shen; Editing by Lee Chyen Yee and Jane Merriman)

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