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Growth in Chinese plastics industry slowed in `08; no improvement on the horizon

The growth rate of Chinese plastic product production remained in double figures in 2008, but did slow, dipping from a 14.48% expansion in 2007 to 11.7% last year, with a further contraction to 10% forecast for 2009. A new Frost & Sullivan report estimates that in 2007 the total production of plastics was about 30.7 million tonnes, with 33.0 million tonnes of plastic products produced, for respective growth rates of 18.54% and 14.48%.

Tony Deligio

January 28, 2009

1 Min Read
Growth in Chinese plastics industry slowed in `08; no improvement on the horizon

Global economic woes have not spared the emerging plastics colossus, according to the report, which states that the Chinese plastics industry is experiencing shrinking demand, declines in plastic prices, and plastic plants closures. The report also indicates that “almost all industry participants have a lower market expectation as pessimism pervades the entire plastics industry.”

The production of Chinese plastic products is estimated to be around 36.9 million tonnes in 2008, falling sharply in the second half of the year after a strong start. Given the environment, Frost & Sullivan’s China consultant for chemicals, materials and food practice, Sammi Sun, believes consolidation is forthcoming. “In China, a great number of small-scale plastic product manufacturers are surviving through selling low-tech products with low profit margins,” Sun states in a release. “A lot of them are likely to be eliminated during the recession period. Large-scale companies are expected to survive through enhancing product quality and winning more market share.”

Sun believes moves by the Chinese government to offset economic hardship, including lowering interest rates, strengthening infrastructure, cutting export taxes, and raising export tax rebate rates, could benefit plastics.—[email protected]

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