The global financial crisis has had a major impact on China's chemical industry. With the introduction of a series of national policies to stimulate economic growth, China's chemical industry will usher in new opportunities for development -
Along with the ups and downs of international oil prices, 2008 was a time of uncertainty for the chemical industry. The dramatic increase in the cost of the previous high oil prices has not yet been digested. The drastic reduction in demand brought about by the ensuing global financial crisis is profoundly affecting the entire chemical industry. In order to maintain growth and expand domestic demand, China has further clarified the "double-shuang" fiscal and monetary policies. Under the strong stimulus of this policy, it is expected that from the second quarter of next year, China's economy will gradually resume growth, and the chemical industry will gradually rise.
Affected by the sharp drop in crude oil prices and declining demand, the prices of major chemical products in China have fallen sharply in the first half of the year. At present, although the drop in crude oil prices has brought downstream business cost pressures down, at the same time, due to the shrinking demand, the prices of downstream chemical products have plummeted. Many product prices have fallen back to the 2007 average prices. The prices of chemical fiber and new materials continued to decline; the soda ash and chlor-alkali prices were relatively stable, but calcium carbide process PVC and other products were still cost-inverted; pesticides, fertilizers and other markets were sluggish, especially the price of phosphate chemicals and chemical fertilizers with relatively strong prices in the previous period fell in November. It reaches 30%.
The market demand for chemical products is mainly related to real estate investment, exports, and automobiles. If the economic growth rate at home and abroad declines in the future, the demand for chemical products will also decline, and even a downturn will occur. With the dual effects of cost reduction and declining demand growth, the gross profit of products will be significantly reduced and the competition in the chemical industry will become more intense.
With the decrease in market demand, the sub-sector continued to diverge. In the industrial sector, due to the slowdown in demand from major downstream industries such as real estate and autos, combined with a large increase in production capacity, the boom in sub-sectors such as soda ash, chlor-alkali and new materials has dropped significantly, and the chlor-alkali industry will enter the restructuring phase. In the agricultural sector, due to the fall season, the demand for agrochemical products has decreased, nitrogen fertilizers and phosphate fertilizers are facing excess production capacity, restrictions on price increases, and export restrictions. The boom of the potash industry is still on the upside, and the price of products is bullish for a long time. Although the pesticide industry is still in a high degree of prosperity, the growth rate is the first of all chemical products, but the industry concentration is low, disorderly competition is not conducive to sustainable development.
In this financial crisis, although China’s economy has inevitably been affected and impacted, it has been relatively less affected than developed countries in Europe and the United States and other developing countries. Looking into the future, China's domestic chemical industry has good opportunities for development, and it does not need to be overly pessimistic about the future. At present, in the process of falling raw material prices, the company’s marginal cost reduction will make it impossible for product prices to maintain firm, or even directly lead to short-term settlement costs. It is expected that the prices of raw materials and products will gradually stabilize in the next 1 to 2 quarters, and the value of the company will be slow. Slowly emerged. From a short-term perspective, the chemical industry is facing a double squeeze from the collapse of high-priced raw material inventory and product prices in the early stages of digestion. In the long run, the chemical industry is faced with a transition from a short-lived, high-cost era to an entirely new phase of increasing product added value and digesting excess capacity.
Recently, the Chinese government has successively introduced a series of robust and highly targeted policies and measures that have opened up new market development space for the chemical industry. On November 12, the executive meeting of the State Council decided to “improve the export tax rebate rate for some products and adjust the export tariffs on some productsâ€, which was the third time this year to increase the export tax rebate rate. The increase in export tax rebate rate will improve the export of chemical fiber textile products. The Ministry of Finance has also recently announced some export tariff adjustment plans for chemical products and chemical fertilizers. Related companies that produce chemical fertilizers will directly benefit from the adjustment of export tariffs.
Li Yongwu, president of the China Petroleum and Chemical Industry Association, pointed out: "The Chinese market is relatively large, the financial crisis has a limited impact on the domestic market, and the country is continuously introducing policies. Therefore, overall, the difficulties of chemical companies are temporary. Enterprises need to be firm. Confidence and careful response."
As the government has been actively encouraging and supporting the chemical industry, China has become a major producer and consumer of chemical industry. The demand for various major chemical products has maintained a rapid and steady upward trend, especially in high-tech materials and specialty chemicals. The demand will continue to increase rapidly with the adjustment of the domestic industrial structure and the improvement of people’s living standards. All these factors will provide a huge space for the development of the chemical industry.
Along with the ups and downs of international oil prices, 2008 was a time of uncertainty for the chemical industry. The dramatic increase in the cost of the previous high oil prices has not yet been digested. The drastic reduction in demand brought about by the ensuing global financial crisis is profoundly affecting the entire chemical industry. In order to maintain growth and expand domestic demand, China has further clarified the "double-shuang" fiscal and monetary policies. Under the strong stimulus of this policy, it is expected that from the second quarter of next year, China's economy will gradually resume growth, and the chemical industry will gradually rise.
Affected by the sharp drop in crude oil prices and declining demand, the prices of major chemical products in China have fallen sharply in the first half of the year. At present, although the drop in crude oil prices has brought downstream business cost pressures down, at the same time, due to the shrinking demand, the prices of downstream chemical products have plummeted. Many product prices have fallen back to the 2007 average prices. The prices of chemical fiber and new materials continued to decline; the soda ash and chlor-alkali prices were relatively stable, but calcium carbide process PVC and other products were still cost-inverted; pesticides, fertilizers and other markets were sluggish, especially the price of phosphate chemicals and chemical fertilizers with relatively strong prices in the previous period fell in November. It reaches 30%.
The market demand for chemical products is mainly related to real estate investment, exports, and automobiles. If the economic growth rate at home and abroad declines in the future, the demand for chemical products will also decline, and even a downturn will occur. With the dual effects of cost reduction and declining demand growth, the gross profit of products will be significantly reduced and the competition in the chemical industry will become more intense.
With the decrease in market demand, the sub-sector continued to diverge. In the industrial sector, due to the slowdown in demand from major downstream industries such as real estate and autos, combined with a large increase in production capacity, the boom in sub-sectors such as soda ash, chlor-alkali and new materials has dropped significantly, and the chlor-alkali industry will enter the restructuring phase. In the agricultural sector, due to the fall season, the demand for agrochemical products has decreased, nitrogen fertilizers and phosphate fertilizers are facing excess production capacity, restrictions on price increases, and export restrictions. The boom of the potash industry is still on the upside, and the price of products is bullish for a long time. Although the pesticide industry is still in a high degree of prosperity, the growth rate is the first of all chemical products, but the industry concentration is low, disorderly competition is not conducive to sustainable development.
In this financial crisis, although China’s economy has inevitably been affected and impacted, it has been relatively less affected than developed countries in Europe and the United States and other developing countries. Looking into the future, China's domestic chemical industry has good opportunities for development, and it does not need to be overly pessimistic about the future. At present, in the process of falling raw material prices, the company’s marginal cost reduction will make it impossible for product prices to maintain firm, or even directly lead to short-term settlement costs. It is expected that the prices of raw materials and products will gradually stabilize in the next 1 to 2 quarters, and the value of the company will be slow. Slowly emerged. From a short-term perspective, the chemical industry is facing a double squeeze from the collapse of high-priced raw material inventory and product prices in the early stages of digestion. In the long run, the chemical industry is faced with a transition from a short-lived, high-cost era to an entirely new phase of increasing product added value and digesting excess capacity.
Recently, the Chinese government has successively introduced a series of robust and highly targeted policies and measures that have opened up new market development space for the chemical industry. On November 12, the executive meeting of the State Council decided to “improve the export tax rebate rate for some products and adjust the export tariffs on some productsâ€, which was the third time this year to increase the export tax rebate rate. The increase in export tax rebate rate will improve the export of chemical fiber textile products. The Ministry of Finance has also recently announced some export tariff adjustment plans for chemical products and chemical fertilizers. Related companies that produce chemical fertilizers will directly benefit from the adjustment of export tariffs.
Li Yongwu, president of the China Petroleum and Chemical Industry Association, pointed out: "The Chinese market is relatively large, the financial crisis has a limited impact on the domestic market, and the country is continuously introducing policies. Therefore, overall, the difficulties of chemical companies are temporary. Enterprises need to be firm. Confidence and careful response."
As the government has been actively encouraging and supporting the chemical industry, China has become a major producer and consumer of chemical industry. The demand for various major chemical products has maintained a rapid and steady upward trend, especially in high-tech materials and specialty chemicals. The demand will continue to increase rapidly with the adjustment of the domestic industrial structure and the improvement of people’s living standards. All these factors will provide a huge space for the development of the chemical industry.
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