Most of petrochemical imports into China fell for the fourth consecutive month in July amid continued slowdown in China's economy and weak downstream demand, analysts said on Friday.

"I think one key reason that led to a decrease in this year's petrochemical imports is the new capacity additions from Sinopec including its Tianjin and Zhenhai crackers," said Xiong Jie, an analyst with Jiangsu-based brokerage house Huatai Securities.

Sinopec started commercial production at its 3m tonne/year petrochemical complex at Tianjin, in early May while its subsidiary, Zhenhai Refining & Chemical Co (ZRCC), started up its 1m tonne/year cracker and downstream units in April.

Increased output from these two facilities in the first half of 2010 had led to the drop in imports, Xiong added.

China's ethylene imports dropped 31% year-on-year in July to 64,502 tonnes while butadiene imports plunged 67% to 9,279 tonnes, according to data released by China Customs.

The reduction in imports also reflected the drop in domestic consumption amid a cooling of the country's economy, analysts said.

Demand for petrochemical products could drop further if China implemented strict measures to curb speculation in the property market, analysts said.

"If the housing market was curbed, all the chemicals from upstream to downstream will definitely encounter reduced consumption," said Wang Hua, an analyst with Dalian-based brokerage firm Bohai Futures Broker Co.

Polyvinyl chloride (PVC), a major chemical used in the construction sector, saw a 29% year-on-year decline in imports to 121,188 tonnes in July, data showed.

However, imports of some products including ethylene, monoethylene glycol and aromatics like benzene and toluene saw a month-on-month rise as demand increased with the onset of the traditional peak manufacturing season.

Consumption of certain petrochemicals peaks between July and October in time for the increased demand from Europe and the US during Christmas, analysts said.

While analysts expected imports to remain weak through 2010 due to the slowdown in the domestic economy, some of them believed that there could be a sharp reduction in petrochemical exports if the downturn in the US and EU markets continued for much longer.