Taiwan Chemical Corporation (1326) Chairman Hong Fu-yuan stated during yesterday's shareholders' meeting that the petrochemical industry is currently facing significant challenges. He forecasts that China’s surplus production capacity will gradually be alleviated over the next two to three years.

Hong revealed that the company's operational strategy will focus on reducing production and sales volume, asserting that the company will not easily abandon its petrochemical business. He acknowledged that the company’s performance outlook for 2024 is not optimistic and expressed his sincere apologies to shareholders. He also thanked the newly added 22,000 shareholders for their support and confidence in the company.

In the first quarter of this year, Taiwan Chemical's sales volume decreased due to the Lunar New Year and uncertainties regarding the U.S. government. However, following the Chinese government's economic stimulus policies, the margins for PX, benzene, and plastic products have improved compared to last year. Despite the shock to global trade from the U.S.'s announcement of reciprocal tariffs on April 2, which disrupted supply chain order, the market remains uncertain. Negative factors such as OPEC+ increasing production have pushed oil prices down, impacting the economic performance of petrochemical products.

Looking towards the second half of the year, Hong stressed that the U.S. and China have reached an agreement to cancel retaliatory tariffs, granting each other a 90-day grace period, which could reshape the global supply chain. However, he believes that the conservative global demand and the effects of excess production will continue to pose significant challenges over the next two to three years.