Industry News
China's polypropylene is still in a period of rapid capacity expansion
With the rapid expansion of China's polypropylene production capacity, it is expected that the total production capacity will account for 40% of the global production capacity in 2023, and the globalization status will rapidly improve. However, due to the lack of product structure and cost advantages, China's polypropylene globalization scale is large and not strong. Vietnam, as the main region to undertake industrial transfer from China, has a strong demand for general materials.
In the future, China's polypropylene industry is still in a period of rapid capacity expansion. Against the backdrop of slowing demand growth, it has entered a stage of comprehensive oversupply, and exports have become one of the effective ways to resolve domestic oversupply. Vietnam has become one of the main export destinations for polypropylene in China due to insufficient local supply, rapid demand growth, and obvious geographical advantages.
As of 2023, the total production capacity of polypropylene in Vietnam is 1.62 million tons per year, with an expected output of 1.3532 million tons. The supply is severely insufficient, and a large amount of demand relies on imported resources to supplement.
From the perspective of polypropylene imports from Vietnam, after the increase in the base of polypropylene imports in 2020, it still maintains a relatively high scale. On the one hand, it is increasingly affected by trade frictions; On the other hand, it has undertaken a large number of industrial transfers from China, and in the following three years, the epidemic has somewhat suppressed demand in Vietnam. In 2023, Vietnam's import volume maintained a high growth rate, and the import scale significantly increased.
From the perspective of China's polypropylene exports to Vietnam, the trend of sustained growth in export scale and volume is evident. Despite the increase in domestic supply in Vietnam and the impact of low-priced sources such as Malaysia and Indonesia, there has been a slight decline in 2022. In the future, with the rapid expansion of China's polypropylene production capacity, price competition will intensify. At the same time, domestic product research and development efforts will increase, product quality will improve, and the proportion of mid to high end products will increase. The comprehensive competitiveness of China's polypropylene products will greatly improve, and the export space of China's polypropylene will continue to increase in the future.
In 2023, China's polypropylene ranks first among Vietnam's main import sources. With the improvement of China's product competitiveness in the future, it is expected to continue to expand in mid to high end products.
Looking ahead to the future, Vietnam's plastic products industry has entered a period of glory due to increased policy dividends, geopolitical factors, labor advantages, low threshold for plastic processing products, and low technical barriers for general products. As a major source of resources, China's exports to Vietnam will continue to maintain a relatively high growth rate in the future, and Chinese enterprises are expected to accelerate their industrial layout in Vietnam.
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