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2009: "Inside and outside troubles" of plastic products such as plastic bottles

October 18, 2018

“Insufficient demand, sluggish industry, Middle East”: This is the industry’s sorrow that can be heard everywhere at the 2009 China Plastics Industry Conference.

The outbreak of the financial crisis is almost deadly to the Chinese plastics industry. The export of Plastic Toys, artificial leather, packaging, silk ropes and other Plastic Products has rapidly declined, resulting in the closure of many plastics production enterprises. The plastic industry report of the China Plastics Industry Association in 2009 shows that a quarter of plastics companies have suffered losses this year. However, Liu Mingfu, deputy general manager of marketing of Guizhou Zunyi Chlor-Alkali Co., Ltd., told the author: “I am afraid that the actual situation is much worse than the statistics. For example, PVC (polyvinyl chloride) production enterprises are losses in the entire industry.” All indications indicate that China is currently The plastics industry is facing a big exam. If it fails, the consequences will be disastrous. Among them, the joint efforts of the government and the enterprise and the rational "drawing" are of utmost importance.

The "Middle Eastern Sword" hanging over his head

In June of this year, China and the Gulf Cooperation Council negotiated in the free trade zone in Riyadh, the Saudi capital. As a result, many plastics enterprises have breathed a sigh of relief. China has not finally joined the OECD, and the five most important ethylene products in the Middle East that most worried Chinese companies are. Production projects have not actually been put into production.

It is understood that five new ethylene cracking projects will be commissioned in the Middle East in 2009, mainly ethylene produced by the ethane process. After the five major projects are put into production, the annual ethylene production capacity in the Middle East will increase from 16.9 million tons in 2008 to 28.10 million tons in 2012. In 2009, the production capacity of ethylene in the Middle East will increase by 7.1 million tons, including Saudi Arabia’s new production capacity will exceed 4 million tons/year, Iran’s new production capacity will exceed 1 million tons/year, Kuwait’s new production capacity will reach 850,000 tons/year, and Qatar’s new production capacity. 975,000 tons/year. The five ethylene cracking projects now only have preliminary intentions. After the intention was reached, the impact of the crisis has not been actually put into production. When the actual production date has not yet reached the date, the current price of ethylene imported from China has not been plummeted. However, the low-cost plastic products in the Middle East are still the sword of Damocles suspended by Chinese companies.

According to statistics from China Customs, China imported more than 400,000 tons of HDPE per month from June to July this year; LDPE (low density polyethylene) has exceeded the monthly import volume since February. 100,000 tons, a record high for imports. In the first four months of this year, the supply of polyolefins from the Middle East increased significantly. Among them, Saudi Arabia has ranked the second largest importer of polypropylene in China and exported a total of 160,000 tons to China, an increase of over 400% year-on-year; Iran exported 89,500 tons of high-density polyethylene to China, making it the fourth largest importer in China. In the same period last year, China exported only 47,500 tons to China. It has to be said that Iran has a lot of crude oil and natural gas, and ethane is very cheap, which can be regarded as the best advantage of Iranian petrochemical products. 50% of the ethylene products produced in Iran are aimed at China and obviously will have an impact on Chinese products.

There is a shortage of domestic demand, there are strong competitors, in the Chinese plastics industry, how can we get out of the doldrums?

Enterprises should take advantage of opportunities to transform themselves

The government and enterprises have come together to save themselves, which is currently being actively carried out by the plastics industry. The 12th Five-Year Plan being researched and formulated by the state is awaited by many plastics companies. However, relying on the country's introduction of stimulus policies, raising export tax rebates, and other industry subsidies, this palliative solution does not address the issue.

"This year's PVC market is also like this. Since last year, prices have risen so dramatically that it has caused great losses for the company." Liu Mingfu said, "This is mainly due to too many new projects launched in the previous two years, making PVC production from A few million tons a year rose to more than 10 million tons, because the overcapacity and other industries caused the product prices ups and downs." To avoid redundant construction and excess production capacity, this is a profound lesson for companies. The prices of PP and PE that have not been massively expanded are relatively stable.

In Zheng Tianlu's opinion: “It's not that companies don’t want to export. The plastics industry is a cyclical industry. The current decline in exports is mainly due to market issues. The main reason is that foreign market demand has not risen, so we can do it now: First, stimulate domestic demand, and second, wait. The most important thing for foreign economic recovery is to invest in technology and develop new products."

"China's petrochemical industry should avoid its own disadvantages, vigorously develop our strengths, and increase the level of research and development, which is the direction for the country to develop in the 12th five-year plan," said Fu An, president of the Guangdong Plastics Industry Association. The advantage of the Middle East is its low cost, but the product structure of the Middle East is very simple. For example, the ethylene yield from the ethane plant is high, but the propylene production is very low and it is too monotonous; followed by the absence of a complete industrial chain, such as household appliances without downstream Customers and so on. The diversified products, complete industrial chain, and research and development of higher-end products are exactly what China's plastics companies are striving for.

Domestic production of plastic petrochemical products, despite the relatively rapid increase in product grades in recent years, is still mostly low-end products. 80%-90% of high-end plastic products in the international market are produced overseas, and Chinese companies produce Very little, mainly because of technical issues.

Yu Chen, director of the Institute of Technology and Economics of Sinopec, stated that Sinopec is currently developing some high-end plastic products. “The profits of high-end products are much higher than the low-end ones, similar to medical plastics, industrial plastics such as car dashboards, and so on. In the direction of R&D, there is still a lot of room for high-end product market prospects in China.”

There is indeed room for technical work. Such as home heating pipes, PPC (polychlorinated polypropylene), PPS (polyphenylene sulfide), etc. can all be used as raw materials for this kind of pipe, but the specific ones are used, which are similar now, and the quality needs to be improved if the enterprise can develop R&D. A better product, it will greatly increase corporate profits.

The government's "salvary gold medal" has achieved initial success

When the plastics industry is in trouble, the government has revealed a “salvage gold medal” for the plastics industry, which mainly includes the “Light Industry Adjustment and Revitalization Plan”, the transformation of value-added tax, the increase of export tax rebates, and the restriction on processing trade. Make adjustments, etc. From December 1, 2008, the export tax rebate rate for polymethylene phenyl isocyanate and other plastic products increased to 13%; from April 1, 2009, the export tax rebate rate for some plastic products was raised; from June 1, 2009 , continue to increase the export tax rebate rate of some plastic products to 13%. In the "Directives for Investment in Light Industry Technology Progress and Technological Transformation (2009-2011), announced by the National Development and Reform Commission, the direction of investment in technological advancement and technological transformation of China's light industry is determined in six directions.

In terms of domestic demand, the country has introduced a series of policies to stimulate domestic demand, such as 4 trillion investment. As a large part of the 4 trillion yuan investment is used in infrastructure projects such as infrastructure construction, it has positively contributed to the development of the plastics industry. On September 25 this year, the Ministry of Commerce will decide to conduct an annual review of anti-dumping of PVC from the United States, South Korea and other places. China began to impose anti-dumping duties on PVC since 2003. On September 29, 2008, the Ministry of Commerce decided to continue levying anti-dumping duties after reviewing imported polyvinyl chloride produced in the United States, South Korea, Japan, and Russia.

With the introduction of a series of supporting policies and economic warming, the benefits of the plastics industry have improved. The operating rate of PVC manufacturers is now rising to about 60%-70%, and it has been 50% before June. Zheng Tianlu, secretary general of the Tianjin Plastics Industry Association, believes: “The recovery of the operating rate indicates that PVC has entered an indirect recovery stage. This is mainly because the entire real estate industry has recovered in the previous stage, and many new projects have started in real estate.” Even so, Zheng Tianlu still Some concerns, he expects the current real estate warming is only temporary, this year the plastics industry is not particularly optimistic, last year's PVC production reached more than 9 million tons, this year's total output will certainly drop 1 million tons, or even a greater decline . Zheng Tianlu stressed that the lack of domestic and foreign demand is still a practical problem facing companies.

The financial crisis is also a crisis, the overall level of equipment is low, the product structure is irrational, and the lack of scientific and technological inputs such as China's plastic industry problems with the outbreak of the financial crisis revealed. Therefore, for plastics enterprises, they should actively find out their own problems, speed up technological progress and product structure adjustments, and increase the added value of products. When searching for experts, the authors found that experts generally believe that now is a good opportunity for the transformation and development of enterprises in the plastics industry: only by seizing the opportunities of industrial restructuring, accelerating technological progress, and transforming the traditional extension of the expansion of the development approach in order to achieve the strategy of the plastic industry Transformation, which has won high marks in the internal exams of internal and external problems.


Triple C International (ShenZhen) Co.,Ltd.was established in 2018. It`s a professional foreign trade company engaged in import and export trade, and carries out business operations such as international trade, cooperative production and intermediary trade. The company mainly provides high-quality OEM-product and ODM-product services for customs in Japan, Southeast Asia, Europe and Unite States, and has a professional technical team that provides hundreds of OEM-product services for dozens of customers, and has dozens of excellent suppliers. The company mainly provides Sewing Products, plastic products, Paper Products, Wooden Products, Household Products and other OEM services, including handbags, gift boxes, Storage Boxes, stationery boxes, kid toys, Paper Boxes, school supplies, office supplies and other products import and export business


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