Opportunities and challenges in the plastics industry

Opportunities and challenges in the plastics industry

With the drop in oil prices, as the downstream plastic product industry chain of oil, it is expected to usher in cost pressure release opportunities.

"Kingdom of Plastic Products", the domestic market share of plastic daily products is about 70%, and the annual consumption of plastic raw materials accounts for one-tenth of China's raw material consumption.

So, what changes will happen to the plastics industry in the context of a plummeting oil price? What measures have Taizhou plastics practitioners taken?

Good: Recovery of domestic consumption

In mid-March, Wang Weiguo, who is engaged in the production of beverage plastic bottles in Urumqi, returned to Xinjiang, preparing to resume production and resume production. During the return journey, Wang Weiguo ordered nearly 100 tons of PET materials to the west and Xinjiang in plastic raw material markets such as Hebei, Jiangsu, and Sichuan. The two days have arrived.

Wang Weiguo has been in the plastics industry for more than 20 years, and the changes in international oil prices have always affected his nerves. "This wave of falling oil prices has driven down the price of plastic raw materials. The price of PET last year was around 7,000 yuan / ton. The price on March 25 was 5,500 yuan / ton, which is another 200 yuan lower than the previous two days."

According to Wang Weiguo, the domestic market for bulk plastic raw material transactions is more responsive to fluctuations in oil prices. "The raw materials like Hebei are much cheaper than those in Xinjiang. In addition, because of the epidemic, the country has extended free high-speed highways and reduced logistics costs. It is all cost-effective."

As the domestic economy resumes production and production resumes and consumption recovers, the fall in international oil prices has also dropped out of "good" for some plastics industries.

During the epidemic, people's homes across the country followed various short videos and fancy cooking skills, which stimulated the enthusiasm of Chinese people to cook and stimulated the consumption of related kitchen supplies.

With the stable epidemic situation across the country, Shuangma Plastic Industry, which focuses on functional plastic kitchen household products, has ushered in the outbreak of the domestic market. "During the period when the domestic consumer stayed at home during the epidemic, the awareness of kitchen supplies was deepened. Due to this enthusiasm for consumption, our domestic orders increased significantly in the first half of this year. At this time, international oil prices fell, and we also took the opportunity to stock up some Raw materials. "Yang Wenjun, deputy general manager of Shuangma Plastics, told reporters that the recovery of the domestic consumer market is good, and to a certain extent, it has recovered the losses of foreign trade orders affected by overseas epidemics.

Challenge: The market is complex and requires careful planning in the future

As an important global processing base of plastic products, many plastic products are exported to all over the world. However, due to the impact of overseas epidemics, the delay or cancellation of export orders has negatively affected the foreign trade enterprises of plastic products in Taizhou more than the benefits brought by the decline in oil prices.

"At present, because of the good demand from domestic market-oriented plastic product manufacturers, their production and operations are gradually on track, and oil prices have fallen to reduce cost pressures. However, export-oriented manufacturers have delayed or even cancelled overseas orders. The demand for raw materials has been reduced, and the decline in oil prices has limited impact on these companies. Many export companies in Taizhou are facing sales challenges. "Miao Wenming, vice chairman and secretary general of the Taizhou Plastic Industry Association.

The reporter learned that due to the demand for epidemic prevention and control, plastic raw materials for masks and other epidemic prevention supplies are still firm in this wave of oil price cuts.

"Recently, the prices of raw materials for meltblown and non-woven fabrics are relatively stable, and are less affected by the decline in oil prices. The prices of other plastic daily necessities have fallen sharply, but because of the poor export situation of plastic products, the sales of raw materials have driven less." Manager Zheng Yanlin said.

In addition, as for the "economic account" behind the drop in oil prices, companies in the plastics industry in Taizhou each have their own calculations.

During the interview, some business operators stated that the spread of overseas epidemics, the complex international trade environment, and the volatility of the oil market are difficult to predict. Even if the current prices of plastic raw materials are falling, in order to combat risks, moderate stocking is mainly adopted.

"Generally preparing inventory from January to February is an indispensable task for most companies, but we will not stock it if there is more. If oil prices continue to fall, more stocks are now at a loss. Zhao Yongjian introduced that in order to resist risks, companies currently combine Plastic futures tools manage inventory.

At the same time, it is not only plastic manufacturers that pay attention to the rise and fall of international oil prices. The product sales side is also looking forward to enjoying the "good" decline in oil prices.

Wang Weiguo said that some customers hope to reduce the selling price recently. "At present, our prices are still stable. Most of the company's customers are old customers. We have agreed ranges of fluctuations. Raw materials will rise and fall within a certain range and the sales price will not change. If the oil price continues to fall in the later period, we will also work with customers. Communicate and reduce prices within reason. "

Yang Wenjun also said that although the current foreign trade has been greatly affected by the epidemic, enterprises should also be prepared for the epidemic. "After all, China is a 'world factory'. After the epidemic, market demand erupts. If customers come to you at that time, it will be out of stock. How to prepare for this depends on the actual situation of the company."