Monday, August 18, 2008

Guangdong: Plastic Raw Materials Imports Down 7.5%

According to Customs statistics, the first half year of 2008, the ports in Guangdong imported plastics in primary forms of 4.229 million tons, down 7.5 percent decline in imports, was mainly caused by market demand and the reduction of plastic raw materials prices curbed consumer demand growth.

According to China's General Administration of Customs news, in the first half of 2008, the ports in Guangdong imported plastics in primary forms of 4.229 million tons, fell 7.5 percent than the same period in 2007, import value of 7.24 billion U.S. dollars, an increase of 6.1 percent, the average import price is 1,711 U.S. dollars / ton, up 14.7 percent.

The main show the following characteristics:

First, the average price of imports of general trade was higher than that of processing trade. The first half of this year, the Guangdong ports to the general trade imports of plastic raw materials 645,000 tons, down 1.4 percent and imports average price of 2,213 U.S. dollars / ton, up 17.4 percent; Over the same period, processing trade imports 3.42 million tons, down 8.3 percent, the average price of imports 1,601 U.S. dollars / ton, up 13.7 percent. General trade imports of plastic raw materials price higher than 612 U.S. dollars of processing trade.

Second, imports of varieties to the initial shape of polystyrene and polypropylene-based. The first half, the primary forms of polystyrene imported 1.217 million tons, down 4.4 percent; primary forms of polypropylene imports 762,000 tons, down 13.8 percent, more than two kinds of plastic raw material imports accounted for 46.8 percent of total imports. In addition, the primary forms of PVC import 358,000 tons, down 20.8 percent, decline in the most significant.

Third, Taiwan is the largest suppliers, since the United States imports dropped substantially. Taiwan, South Korea and Japan is the three major suppliers. The first half, imports from Taiwan 1.219 million tons, down 6.7 percent, the total imports of 28.8 percent since South Korean imports of 649,000 tons, an increase of 2.1 percent since Japan imports 450,000 tons, down 14.1 percent from the United States imported 244,000 Tons, the decline in larger, 24.9 percent.

The first half, the price of plastic materials imported from Guangdong increase, mainly by the following factors in the effect of:

First, the soaring international oil prices driven up prices of plastic raw materials. As more than 90 percent plastic raw materials are from crude oil, and since 2008 the international market price of crude oil climbed all the way. Early July, the crude oil futures prices into the top 145 U.S. dollars more, thus boosting naphtha, ethylene and other basic petrochemical raw materials prices rose. By this Impact, the prices of plastic raw material also rose overall.

Second, Downstream product export growth slowed, directly impact on imports' demand of plastic raw materials. Guangdong Province is plastic products production and export base. In the first half, Guangdong Province exported 1.768 million tons of plastic products, slightly decrease by 0.2%. The reason is since 2006, the state has twice reduced the export tax rebate rate of plastic products, then add plastic products in the export processing trade restricted directory. These series of policy adjustments, weakened corporate's profits. Coupled with the impact of the appreciation of the Renminbi, the enterprise's export pressure significantly increased, making Guangdong's exports of plastic products significantly slow down, even a negative growth. The domestic plastics industry has slowed demand for imports of plastic raw materials, thus leading the price of plastic raw materials declined.

Third, plastic raw materials prices inhibit consumption growth in demand. The first half, Guangdong imported plastic raw materials at an average price of 1,711 U.S. dollars/ton, up 14.7 percent. The five common plastic polyethylene, polypropylene, polystyrene, ABS resin average price of imports rose 18.7 percent, 15.5 percent, 12.8 percent, 11.6 percent; average price of PVC imports amounted to 21.2 per cent or more.

The plastic raw materials are extensive useful. The price of import plastic material continue to rise, will bring a tremendous cost pressures on downstream manufacturers. The plastics industry come into high-cost operational phase, then a large number of low-level of small businesses will have to face the throes of industrial upgrading. Enterprises should do everything possible to lower production costs, the technological reformation will become the only choice to manufacturing processing enterprises in the fierce competition for survival in a natural choice.

Originally Posted:
Author: Angulo Fu