State Information Center reported that China's chemical fibre output is expected to grow 8 percent to reach 17.5-17.6 million tons in 2006 thanks to expanding domestic demand.

The latest report of the center's Economic Forecast Department also forecast that the industry's sales income will rise 15 percent to 280 billion yuan (35 billion US dollars) this year.

Last year, the industry's sales income amounted to 250.398 billion yuan (31 billion dollars), an increase of 27 percent year on year, or 5.85 percentage points lower than the previous year.

The profits fell 20 percent year on year to 4.852 billion yuan (607 million dollars) as a result of rising production cost prompted by worldwide skyrocketing of crude oil prices and tough competition.

In 2005, the industrial output value of the chemical fibre industry rose 25.99 percent year on year. The growth rate, however, was 6.09 percent lower than in 2004 due to a sharp drop in industrial production.

Meanwhile, the economic losses of loss-making chemical fiber enterprises reached 3.138 billion yuan (392 million dollars) last year, a sharp rise of 84.24 percent from 2004. The increase rate was 77.76 percentage points higher than in 2004.

The report predicted that the price of chemical fiber products will remain high in 2006 due to climbing production costs.