Plastic pipes to continue good growth in China

04-Oct-05

Demand for plastic pipes registered a growth of 15% annually, ranking China as world number one in plastic pipes. With the boosting of the real estate market and transformation of urban public utilities, China's demand for plastic pipe is expected to continue growing in the coming years. Enterprises producing PVC pipe have snatched a big share of the market, but their production is still focused on water supply and drainage pipes, and rain drainage pipes and parts, leading to saturation of the market and fierce competition in the sector. Besides the cost rising pressure from the price hikes of raw materials, PVC pipe producers have been encountered with another problem- a ban on lead. Lead salt has long been used as a main heat stabilizer because of its low price and fine performance. For the purpose of environmental protection, the Ministry of Construction issued an announcement in 2004, requiring use of CPVC water supply pipes produced with non-lead-salt stabilizer nationwide. Beijing Municipality restricts use of PVC drinking water pipes made with lead salt stabilizer as of April 1, 2005. At the same time, the country's electric power sector has also banned the use of lead-salt and organic tin stabilizer in CPVC protection pipes within the licensed part of power grids in order to prevent from environment pollution. The fast growing polyethylene pipes, besides their original market shares of gas and heating pipes, have entered the market of water supply and drainage pipes and pipe parts for urban and rural use. Also, the price rise rate of polyethylene is smaller than that of PVC, exerting smaller pressure on production costs. Furthermore, polyethylene pipes do not face the lead ban, adding advantages to the PE pipe producers' basket.