STRONG demand has helped Shanghai Petrochemical Co boost interim profits by 35 per cent to 772.78 million yuan (HK$690.35 million according to the company) for the six months to June 30. The better-than-expected result comes despite a 25.3 per cent increase in the price of crude oil, its main input to production. Analysts had been concerned that the break up of oil subsidies would eat into profits, but strong demand for its products enabled it to pass on most of the cost to its consumers in the form of higher prices. Company chairman Wang Jiming said: ''The average prices for the company's fibres, resins and plastics, intermediate petrochemicals and petroleum products during the first half rose by 27 per cent, 20 per cent, 12 per cent, and three per cent, respectively.'' ''Over the past six months China's economy continued to expand and along with it the growth in demand for petrochemical products. ''We are well-positioned in the market place and have successfully taken advantage of the increased demand.'' Earnings per share were 0.118 yuan and an interim dividend of 0.04 yuan was declared. Turnover increased 0.9 per cent to 4.3 billion yuan based on the adjusted turnover of 4.26 billion yuan for 1993, which reflects the new value-added tax (VAT) system. The company has also transferred 210 million yuan from opening stock balances and recorded it as deferred assets to take account of the tax. The profit per share on a fully diluted basis was 11.8 per cent and the return on net assets was 8.53 per cent. During the first half of the year, the company processed 2.42 million tonnes of crude oil, a drop of 1.82 per cent over last year. This reduction was due mainly to the company's decision to spread its processing more evenly throughout the year and to efforts to improve profit margins for crude-oil processing. In spite of the price increase introduced on May 1, gross pre-tax margins for crude oil processing increased 36.75 per cent. Mr Wang attributed this to productivity gains. The company's tax bill was also reduced as a result of the implementation of the VAT, which replaced the former product sales tax.