China's plastics industry expects market recovery

Plastic industry production volumes, sales, imports/exports and company efficiency have been improving steadily in the first half of this year, as per a joint report by China National Light Industry Information Center (CNLIIC), China Plastics Processing Industry Association (CPPIA) and Dalian Commodity Exchange (DCE). As per Adsale Industry Portal, 10% growth is projected for China's plastics industry in the second half of this year if the good progress in the first half continues. In the first 5 months this year, total plastics production value amounted to nearly RMB381.6 bln, up 7.5% year-on-year. Monthly production volume climbed rather slowly to approximately 16.1 mln tons in May. Except in January, all of the monthly output volumes up till May 2009 were higher than that in the same month last year or in 2007. In addition, the sales value of plastics in May hit nearly RMB371 bln, showing a 6.5% year-on-year increase. That also contributed to around 10% of the total sales value of China's light industry. The sales ratios also signal that a market upturn could be approaching. During the first five months of the year, sales ratio in the plastics industry averaged at 97.2%. The monthly sales ratio has started to climb since March and has reached a peak of 97.5% in May. Except plastic artificial leather, synthetic leader and plastic parts manufacturing, all other sub-sectors recorded sales ratios of at least 97%. However, the imports and exports of plastics have recovered rather slowly. Information from the China Customs shows that the total value of imports and exports of plastics amounted to US$12.61 bln in the first four months of this year. The January-April export value fell by 5.33% to approximately US$9.74 bln, while import value dropped by 26.29% to nearly US$2.88 bln. In February, exports were at its worst as it was the industry's traditional low season. But the figures started to bounce back in March and went further up by 3.27% in April compared to the previous month. The same trend also applied in imports. Monthly import value tacked back in March, surging 22.72% compared to the previous month, and grew further by 15.45% in April compared to March 2009. Dwindling market demands and overproduction have led to huge losses in certain plastics product sectors. From January to February, profits of the plastic part and plastic film industries went down by 55.89% and 38.64% to RMB215 million and RMB360 million respectively. The foam plastics and artificial leather manufacturing sectors were also losing money. But for those who produce plastic sheet, pipe, profile, filament, rope and container, their profits have been on the rise. Productions of sheet, pipe and profile were the most profitable in the period, seeing profits rising by 15.96% year-on-year to top RMB901 million.