The development status of China's plastic raw materials industry is not optimistic

There are many reasons for the increase in imports of plastic raw materials, and overseas dumping is one of the main reasons. As countries in the Middle East have used cheap crude oil to produce petrochemical products on the spot, starting in the second half of 2009, the global petrochemical industry, including China, has been hit by products from the Middle East. With the huge advantage of low-cost raw materials competition, the production capacity of polyethylene in the Middle East will expand rapidly, reaching 26 million tons by 2010, while domestic consumption will only account for 30% to 40%, most of which will be exported. The target country of export is China. The price of polyethylene in the Middle East is about US$150 lower than that of China, which is impossible for domestic enterprises to compete with. Compared with polyethylene, the cost advantage of polypropylene and PVC in the Middle East is not obvious, but the production capacity will also increase.

However, with the reduction of import costs, the domestic polyethylene and polypropylene market will also face the impact of imported materials from ASEAN countries. The sales pressure of domestic raw materials market will increase, and the contradiction between imported materials and domestic materials will escalate. The impact of the completion of the China-ASEAN Free Trade Area on the domestic plastics raw materials industry will accelerate the adjustment and optimization of industrial structure and improve the competitiveness of domestic products in the long run. In the short-term, it will increase the domestic market price. Resistance even led to a significant fall in market prices.

The impact of coal chemical industry on the plastics raw material industry has gradually emerged. As oil prices rise, coal-to-olefins and polymers have certain cost advantages, which puts certain pressure on the market. With the economic recovery and rising market demand, the production of plastic raw materials in China, which is currently in production or semi-discontinued, will resume production or increase operating rates. With the rapid expansion of production capacity, the continuous increase of production, and the influx of imported materials, the plastic raw material market is bound to shift from the seller's market to the buyer's market. The intensity of market competition can be imagined.

In summary, plastics manufacturers believe that despite the increase in domestic demand, the influx of imported products and the concentrated release of domestic production capacity will lead to a surge in resources, and the gross profit of the plastics raw materials industry is difficult to be optimistic. On the other hand, crude oil and ethylene markets play an important role in the price trend of plastic raw materials. The rise in oil prices will inevitably lead to an increase in the price of ethylene, and the price of plastic raw materials will also rise. Although the space for price increases is limited in the short term, in the long run, with the gradual rise in the cost of crude oil and ethylene, the days of plastic materials such as polyethylene will not be far away.