With the rapid development of the scale of China’s polypropylene industry, there is a high probability of oversupply of polypropylene in China around 2023. Therefore, the export of polypropylene has become the key to alleviate the contradiction between the supply and demand of polypropylene in China, which is also one of the key directions of investigation for existing and planned polypropylene production enterprises.
According to customs statistics, polypropylene exported from China in 2021 mainly flows to Southeast Asia, among which Vietnam is the largest exporter of polypropylene to China. In 2021, polypropylene exported from China to Vietnam accounts for about 36% of the total polypropylene export volume, accounting for the largest proportion. Second, China’s exports to Indonesia and Malaysia account for about 7% of the total polypropylene exports, also belonging to Southeast Asian countries.
According to the statistics of export regions, China exports to Southeast Asia, accounting for 48% of the total, is the largest export region. In ADDITION, THERE ARE a large number of polypropylene exports to Hong Kong and Taiwan, in addition to a small amount of local consumption, there are still a large number of polypropylene re-exports to Southeast Asia.
The actual proportion of polypropylene resources exported from China to Southeast Asia is expected to reach 60% or more. As a result, Southeast Asia has become China’s largest export region for polypropylene.
So why is Southeast Asia an export market for Chinese polypropylene? Will Southeast Asia remain the largest export region in the future? How do Chinese polypropylene enterprises advance the layout of Southeast Asia market?
As we all know, South China has an absolute location advantage in the distance from Southeast Asia. It takes 2-3 days to ship from Guangdong to Vietnam or Thailand, which is not much different from China to Japan and South Korea. In addition, there are close maritime exchanges between South China and Southeast Asia, and a large number of ships need to pass through the Strait of Malacca in Southeast Asia, thus forming an innate maritime resources network.
In the past few years, the consumption scale of plastic products in Southeast Asia has grown rapidly. Among them, the growth rate of plastic products consumption in Vietnam remained at 15%, Thailand also reached 9%, while the growth rate of plastic products consumption in Malaysia, Indonesia and other countries was around 7%, and the consumption growth rate of the Philippines also reached about 5%.
According to statistics from Vietnam’s Ministry of Industry and Trade, in 2021, the number of plastic products enterprises in Vietnam exceeded 3,000, including more than 300,000 employees, and the industry revenue exceeded $10 billion. Vietnam is the country with the largest share of polypropylene exports to China and the largest number of plastic products enterprises in Southeast Asia. The development of Vietnam’s plastic industry is closely related to the stable supply of plastic particles from China.
At present, the consumption structure of polypropylene plastic products in Southeast Asia is closely related to the level of local processing and manufacturing industry. All plastic products in Southeast Asia are gradually developing to scale and large-scale based on the advantage of low labor cost. If we want to expand the application of high-end products, we must first guarantee the premise of scale and large-scale, which can not be compared with the Chinese plastic products industry. The scale development of plastic products industry in Southeast Asia is estimated to take 5-10 years.
China’s polypropylene industry in the future in a short period of time there is a large probability of surplus may, in this context, export has become the key direction of China’s polypropylene to seek to alleviate contradictions. Southeast Asia will still be the main consumer market for China’s polypropylene export in the future, but is it too late for enterprises to lay out now? The answer is yes.
First, China’s excess of polypropylene is a structural surplus, homogeneity of excess supply, and southeast Asia region is homogeneous polypropylene brand consumption is given priority to, polypropylene downstream products in China under the premise of rapid upgrade iteration, China produces the homogeneity of polypropylene grades, only for export to southeast Asia, in order to alleviate the contradiction between supply and demand of domestic. Second, the plastics industry in Southeast Asia is growing rapidly, driven on the one hand by domestic consumption, and on the other hand, Southeast Asia has gradually become the “manufacturing plant” of Europe and North America. In comparison, Europe exports polypropylene base material to Southeast Asia, while China exports to Southeast Asia, with excellent location advantage.
Therefore, if you are now a polypropylene factory overseas consumer market development personnel, Southeast Asia will be your important development direction, and Vietnam is an important consumer development country. Although Europe has imposed anti-dumping punishment on some products of some countries in Southeast Asia, it is difficult to change the current situation of low processing cost in Southeast Asia, and the plastic products industry in Southeast Asia will continue to develop at a high speed in the future. Such a big cake, estimate the enterprise that has strength begins layout already.
Post time: Aug-03-2022