Source: CPRJ China Plastic & Rubber | Author: Jiang Lu | Release date :2014-06-03

 
Last year, the Chinese plastics industry overcapacity. According to statistics, the annual production capacity of about five common plastics 57.35 million tons, the actual production of about 42.99 million tons, up 10 million tons of excess capacity. Which polyvinyl chloride PVC, polyethylene PE, polypropylene PP, PS and ABS polystyrene cumulative production was 15.295 million tons, 11.74 million tons, 12,385,000 tons, 2,291,000 tons and 1,276,800 tons.

Overcapacity mainly in the following three reasons:

First, over-investment, the construction of more serious repeat the same technology in the downstream product saturated, flooded and the new device, and in some places through a variety of incentives, affect the normal business investment decisions, leading to serious plastics industry expansion, overall industry overcapacity.

Second, continue to increase downward pressure on the domestic economy, reduced exports, leading to downstream products demand slowdown, exacerbated by the plastics industry overcapacity pace to some extent.

Third, innovation is weak, high-tech industry, lack of high value-added plastic products, structural contradictions outstanding performance, and the high energy consumption and high emissions still account for a large proportion of backward technology and equipment, capacity utilization is very low.

In addition, according to Treasure Island statistics, in 2014 the top five common plastics industry overall production capacity is expected to reach 10.152 million tons, with an average increase of 17 percent, while the plastics industry average profit margin was 4.9%, less than the other 17 National Light Industry 5.45 % average profit margin. Overcapacity and lack of innovation lead the plastics industry is the main reason for the low profit margins.