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Industry experts: Multiple unfavorable factors put pressure on polyolefin prices. Author/Source: Sinochem New Network. Date: June 27, 2019. Clicks: 30. On June 26, the “2019 China Plastic Industry Conference” hosted by the Dalian Commodity Exchange was held in Hangzhou. Yang Shuhai, general manager of Daon Chemical Co., Ltd., said at the meeting that China’s polyolefin production capacity is set to increase by around 70% over the next 3-5 years. Coupled with weak demand growth, as well as various unfavorable factors such as the introduction of global policies banning or restricting plastic use, these factors are pushing down the price levels of polyolefins further. Yang Shuhai explained that the new production capacity will be put into use in the second half of this year: due to various factors, almost all the facilities that were scheduled to start operation in the first and second quarters of this year have been delayed. It is estimated that 5 million tons of production capacity will be brought online in the domestic market, and 8 million tons abroad, throughout the second half of the year. In the first quarter of 2019, the growth rate of domestic plastic product production was only 3.5%, continuing the trend of low growth. Looking at several major industries closely related to plastics, car sales from January to April declined by 14.4% compared to the same period last year. Among home appliances, the production of washing machines, which rely heavily on plastics, increased by 1.8%, while production of air conditioners continued to show a decline. The non-woven fabric market saw a significant drop in exports due to the Sino-US trade war. Due to factors such as the difficulty in decomposing polymer materials, global regulations on the use of plastic products have become increasingly strict in recent years. From shopping bags to single-use plastic items, from packaging for deliveries to materials used for food delivery, more and stricter rules are being introduced, which directly affects the development of the plastic industry. Furthermore, the Sino-US trade war has had a significant negative impact on the market: China exports around 2.8 million tons of polyolefin products to the United States, and when additional associated products are taken into account, the total export volume exceeds 4 million tons. With the U.S. tariffs of $200 billion raised to 25% and additional tariffs of $320 billion imposed, it will become very difficult for Chinese goods to be exported to the United States in the future; these products account for around 7% of China’s total apparent consumption of polyolefins. In summary, various unfavorable factors such as the concentrated release of production capacity, weak demand, and Sino-U.S. trade tensions will further drive down the price level of polyolefins.