Share only 30% of China's modified plastic industry how to break through in foreign companies?

- Dec 27, 2019-

Recently, basf's new integrated production base project in guangdong was officially launched, and the first batch of modified engineering plastics and TPU devices were constructed.

Modified plastics avoid the disadvantage of limited application of single plastics. What is the status of modified plastics in China?

And how?


China's modified plastic structural surplus, relatively concentrated production and marketing


In recent years, the demand for modified plastics in China has been on the rise. In 2018, the output of modified plastics in China was 17.83 million tons, up by 6.4% year on year, and the modification rate was 20.8%.

The demand was about 11.89 million tons, up 7.1% year on year, with the growth rate falling slightly.


In terms of the composition of modified plastic products in China, modified PP, modified ABS and modified PS are the main components, while modified PET, modified POM and modified PPO account for a relatively small proportion.


In terms of regions, the yield of modified plastics in China is mainly concentrated in guangdong and zhejiang, and the production and marketing are mainly concentrated in east China and south China.


There is a structural surplus, with the state-owned sector accounting for only 30% of the market


The total number of modified plastics production enterprises in China is more than 3,000, most of which have an annual output of less than 3,000 tons, while only more than 70 have an annual output of more than 3,000 tons. The production scale of these enterprises is generally relatively small.

The product's market condition also presents the primary product many, the intermediate product quality is not stable, the high-level product lacks the characteristic.

As a result, there is a certain surplus in the low-end sector, while the high-end sector needs to be imported from abroad, resulting in a structural surplus.


Although there are many universities, scientific research institutes and enterprises engaged in the research on modified plastics, the research direction of universities and scientific research institutes focuses on theory, and the research on engineering application technology is less.

And the enterprise is weak in high performance material design, advanced molding technology and other aspects of research and development.

Some enterprises focus on importing foreign technology and neglect independent research and development.


Domestic enterprises account for about 73% of the modified plastics production capacity in China, and foreign or joint ventures account for about 27%.

However, from the perspective of market share, the market share of domestic enterprises is only 30%, while the market share of foreign enterprises is up to 70%. The market of modified plastics for household appliances in China is mainly occupied by foreign enterprises.


At present, basf, LATI, dupont, solver, dow, lanxers, asahi, Pauli, samsung, LG, kumho and DSM have set up modified plastic production bases in China.


Most of these companies are large chemical enterprises integrating raw material production, modified processing and product sales. However, domestic modified plastic enterprises have not yet reached the stage of front and rear integration, which restricts the control of raw material cost.


Downstream demand is stable and integrated development has advantages


The two main application fields of modified plastics in China are household appliances and automobiles. With the steady growth of domestic economy, the demand for modified plastics in household appliances will maintain a relatively stable and small growth.


Due to the development of automotive lightweight technology and the rapid growth of new energy vehicles, the average consumption of a single vehicle in the automotive industry will increase significantly. It is expected that the demand in the automotive sector will maintain a growth rate of around 4-5% in the next few years.


The demand for modified plastics will maintain a relatively stable growth rate and have a development prospect.


The raw materials of modified plastics are mainly general plastics and engineering plastics, and the price trend of these plastics is basically consistent with the price trend of crude oil, indicating that the upstream enterprises have strong cost pass-through ability.


Therefore, in addition to increasing research and development efforts and investment to produce high-precision products, integrated enterprises with upstream resources will have great advantages