2014 Plastic Annual Report-Indeed affect the whole body

2015-02

 

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Table of contents

Chapter 1: Plastic Market in 2014 3

1.1        International oil price (WTI) –Rapid fall 3

1.2 Upstream monomers – Killing fall 5

1.3Plastic raw materials market - Downslope. 13

Chapter 2: Plastic Market Forecast in 2015 18

2.1 Imports of ABS/PS/PP. 18

2.2 Global economy–Ups and Downs. 22

2.3 Statistical Results of Corporate Business Environment Survey. 24

2.4 Forecast of Plastics Market 27

Chapter 3: Summary – Reach the bottom and rise 31

Chapter 4: Appendix 32

4.1Asian Chemical Plant Device Events in 2015. 32

4.2 Major plastics events. 34

 

Chapter 1: Plastic Market in 2014

1.1  International oil price (WTI) –Rapid fall

Figure 1: International Oil Price（2013-2014）

Source：NYMEX

Table 1: WTI fluctuation（2013-2014）

	2013 average	2014 average	2014 Vs 2013
WTI	USD97.9	USD92.9	↓5.1%

 

Affecting by a series of geopolitical events regarding the international oil price in the upper half of 2014, the price was stable with growth. In the lower half of the year, the international oil price dropped greatly and unexpectedly. There are several factors causing such greatest reduction in oil price since the financial crisis in 2008:

 

Supply:

• Due to the excessive crude oil supply and the increasing shale oil supply, the continuous high oil price in recent two years has drove America in extracting shale oil resources. This revolution is also brought because of the target of an independent energythe US chasing since 1973. In late-July, the rate of operation of oil refinery in America was 93.8%, which created a new record since summer in 2005, this indicated the expansion of oil refinery in America and the increase of refined oil exports.

 

• Other than the US, other major petroleum producing countries also greatly extracted oil. Organization of the Petroleum Exporting Countries (OPEC) even maintained its leader position regarding petroleum production, OPEC chose to make a decision of unchanged quantity in the public-concerned assembly in November, which led to a huge reduction in crude oil futures once again.

 

• In 2014, Russia’s production quantity of petroleum has created a new high in recent 20 years, the daily quantity of crude oil has reached 10580 million tubs, Iraq’s petroleum exports has increased sharply to the highest level since 1980. In September, OPEC’s total production quantity of petroleum was 30600 million tubs per day, which has outreached the implementation in 2012(30000 million tubs) by 600 million tubs.

 

Demand:

• International Energy Agency (IEA) claimed the daily demand of crude oil was 92400 million tubs in 2014, the annual growth was 680 million tubs, which was the lowest growth in these five years. The US Energy Information Administration (EIA), International Energy Agency (IEA) and Organization of the Petroleum Exporting Countries (OPEC) made announcements one after another, declaring to pass down the growth expectations towards global petroleum demand.

 

• The China manufacturing industry is also slowing down, the Project Management Index (PMI) of it is lingering at around 50 in recent three years. The accumulated import of crude oil refers to 280 million tons this year, the import of refined oil decreased 26% at the same period. The slowdown of economic growth in China has formed constraints towards demand growth.

 

Politics:                                               

• In general, the price reduction of oil would not cause serious impacts towards economy in Saudi Arabia. As the greatest petroleum exporting country in the globe, Saudi Arabia has 25% of the world’s petroleum reserves, as well as mastering 85% of the world’s petroleum idle production capacity. Its oil production cost was lower than USD30 per tub, therefore, Saudi Arabia could possibly accept a lower oil price.

 

• The world’s major energy source originates from petroleum. The price reduction of oil was beneficial to the demand side of petroleum, yet it did not benefit part of the suppliers. Such reduction would directly affect Russia’s economy, the oil price has touched the most sensitive nerve of Ruble. In 2014, the Ruble-USD exchange has depreciated over 50%, Russia did not compromise on Ukraine problem, which was restricted by the West while the economy was encumbered. The Russia government expected that the GDP growth would wither 0.8% in 2015.

 

To conclude, the international oil price fell rapidly in the lower-half year of 2014. The average value of the year was USD92.9, which has dropped 5.1% compared with the previous year, the end of the year decreased 45% compared with the beginning. This was the greatest reduction since 2008.

1.2 Upstream monomers – Killing fall

Figure 2: Upstream monomers SM&C3（2013-2014）

Source: Chem99

Table 2: SM, C3 fluctuation（2013-2014）

	2013 average	2014 average	2014 Vs 2013
SM	USD1686	USD1486	↓11.9%
C3	USD1338	USD1280	↓4.3%

 

The international oil price has appeared a great fall quotation in June 2014, after all, as one of petrifaction products, Styrene (SM) also fell greatly. The reduction of crude oil at the end of the year has reached 45% compared with the beginning, and the reduction of SM was similar to that of crude oil, which was 44%.

 

Figure 3：Fluctuations in average value of SM upstream and downstream product

(2013-2014)

 

 

 

 

 

 

 

 

Source: Chem99、ACIS、HK Traders

 

There are several reasons causing the changing trend of SM in 2014:

• The cost lacked support. The SM upstream monomer has reduced greatly, Ethylene has decreased about 8.1% in average compared with 2013, and Benzene has decreased 7% compared with 2013. Being negatively affected by the low quotation of upstream monomer, the price of SM dropped continuously.

 

• The reserve was restricted. SM has experienced a strong rising phrase of 2013, chemical factories selling monomers could maintain a higher profit. Along with the time, the production quantity and reserves increased gradually. Comparing with 2013, SM appeared an opposite movement obviously.

 

• The demand went weak. The SM downstream demand only grew 1.3% in 2014, which was lower than the 7% in 2013 according to ICIS statistics. The SM downstream products EPS, PS and ABS have certain relationships with the real estate industry. In 2014, investments from all of the real estates in China dropped 9.3% compared with the same period last year, which has built a new low since 2011. The overall weak of the real estate industry has affected SM relatively greatly.

 

The average value of SM was USD1486 in 2014, which has decreased 11.69% compared with the previous year. The reduction in the fourth quarter was the biggest, which has pulled down the entire average value of the year.

 

Figure 4：Fluctuations in average value of C3 upstream and downstream product

(2013-2014)

 

 

 

 

                                                    

 

 

 

 

 

 

 

 

 

 

Source: Chem99、ACIS、HK Traders

 

 

 

 

 

 

 

 

Figure 5：Import quantity of C3 in China (2010-2014)

Source: Chem99

 

Along with the great reduction of the upstream raw material and the buying price of Propylene (C3), the C3 market has also appeared a falling trend continuously. The reduction of C3 was rapid particularly close to the end of the year:

 

• The cost had weak support. Crude oil, Methyl alcohol and Methane had fallen in different extents, C3 also dropped with them. Besides, the buying price in Asia dropped greatly as well, such as prices of CFR Taiwan, CFR Southeast Asia and FOB Japan dropped about 30% at the end of the year. The quotations restricted each other.

 

• The reserve increased. The falling buying price has lowered the cost of import in a certain level, but at the same time increased the import quantity continuously, which would finally create a crush towards the price of C3. China is the largest consumption country on C3 imports, the import quantity is increasing in recent years, the total import quantity in 2014 was around 3000 million tons, which Korea, Japan and Taiwan ere the major import countries and regions of origin.

 

• The demand went weak. The market quotation of C3 downstream products had a relatively great fluctuation. In the entire year, apart from the growth of Polypropylene (PP) and Acrylonitrile (AN), most of the rests fell, which minimized the demand activeness towards C3.

 

Due to the above factors, the average value of C3 in 2014 was 4.3% lower than the previous year, the market was weak in the lower-half year.

 

Figure 6：Upstream monomers AN&BD (2013-2014)

Source: Chem99

Table 3: AN, BD fluctuation（2013-2014）

	2013 average	2014 average	2014 Vs 2013
AN	USD1833	USD 1965	↑7.2%
BD	USD1475	USD1306	↓11.4%

 

 

 

 

 

 

 

 

Figure 7：AN device overhaul (2014)

China		Other Asian regions
Province	Capacity(unit:million tons)	Chemical factory	Capacity (unit: million tons)
Heilongjiang	16	Asahi Kasei Corporation	28
Jilin	45.2	Mitsubishi Chemical	45
Liaoning	9.2	Taekwang Industrial	27
Shandong	21.8	韓國東旭石化1號裝置	31.5
Anhui	21	韓國東旭石化2號裝置	56
Shanghai	39	Formosa Petrochemical Corporation	28
Gansu	3.5	Sinopec	24
Total capacity	155.7	Total capacity	239.5

 

Due to the downturn quotation of bulk commodities, it was uneasy for the market of Acrylonitrile (AN) to increase in 2014. The major reasons that caused defense ability of AN were as follows:

 

• The supply was tense. In 2014, the AN decomposition device overhaul has affected the production capacity for around 2395 million tons. Some of the cracking plants had around 90% operational rate, the overhaul has lowered the capacity.

 

• The domestic inventory had support in low position. China, as one of the consumption countries, the AN cracking plant had around 90% operational rate in the fourth quarter. There were quite a lot of domestic device overhaul, the supply recovered slowly, the stocks of factories maintained in a low position, the market has enlarged the consumption towards import resources, which has supported the high position of the Asian AN market.

 

• The demand was great. In 2014, the acrylic fiber industry had around 90% operational rate in general, which has supported the raw material AN market obviously. At the end of the year, the delivery of most of the winter clothes has completed, the textile industry has weaker demand, the acrylic fiber industry had a lower operational rate at around 80%, yet it still referred to a high position, which has supported the raw material AN market.

 

In 2014, AN was affected by the tense supply and the better demand, the overall performance was stable with growth. The average value of the year was USD1965, which has increased 7.2% compared with the previous year.

 

Figure8：Fluctuations in average value of BD upstream and downstream product

(2013-2014)

 

 

 

 

 

 

 

 

In 2014, Butadiene (BD) was positioned in a falling market in most of the time, particularly at the beginning and the end of the year, the reduction was obvious due to the following reasons:

 

• The production capacity increased. The major source of BD was the by-product when decomposing Ethene in Naphtha, therefore, the change would have greater impact towards the capacity of BD. In the entire year, the total Ethene supply capacity of three cracker factories, CPC section IV, V and new III, has increased from 900 million tons in 2013 to 1200 million tons, the growth was 30%, which has relatively increased the production capacity of BD.

 

• There was a crush in price of natural rubber. The falling price of natural rubber has built pressure towards synthetic rubber factories. From October 2013 to September 2014, the price has fallen greatly for 33%. A lot of Asian synthetic rubber manufacturers had to lower the operational rate due to distraction of profit liability. Regarding Kumho Petro Holdings Co. Limited, the BR manufacturer, located at Lishui, had 327 million tons for annual production; the SBR manufacturer, located at Ulsan, had 481 million tons for annual production. The reduction has reached 51% and 15% respectively, which has minimized the consumption towards BD.

 

• The demand towards synthetic rubber decreased. BD was the major raw material in producing synthetic rubber, such as Styrene Butadiene Rubber (SBR) and Cis-poly butadiene. China, as the world’s tire manufacturer, 40% of the annual tire production capacity was used as export, 50% of the destinations were the European Union and America. The self-sufficiency rate of synthetic rubber in China was low and relied on import. However, the European Union has officially implemented the Green Tire Labelled Scheme in November, which has restricted the development of the tire industry in China in a certain extent, and thus, the demand towards upstream synthetic rubber was minimized.

 

In general, the price reduced in 2014 due to the growth of BD capacity and the yet to prosperous demand. The average value of the year was USD 1306, the reduction was 11.4%.

 

 

 

 

 

 

 

 

1.3Plastic raw materials market - Downslope

ABS

Figure 9: Comparison of spot price and cost in ABS market（2013-2014）

Source: HK Traders

The cost of ABS in the graph is 0.6*SM (Styrene) +0.25*AN (Acrylonitrile) +0.15*BD (Butadiene) +US$300. It hasn’t included expenses like terminal handling charges.

Table 4: ABS fluctuation（2013-2014）

	2013 average	2014 average	2014 Vs 2013
ABS Spot price	USD 1950	USD1893	↓2.9%
ABS Cost	USD 1991	USD 1879	↓5.6%

 

In 2014, ABS has dropped 2.9%, it first grew and then fell. At the time before mid-April, the cost was still above the market price. Until May, the policy of reducing production was working while chemical factories were losing.The “upside down” price has disappeared, the market price was increasing gradually. Reasons are as follows:

 

• The cost of ABS has greatly increased at the time when the international oil price grew to USD106 while the monomer raw material SM increased for five consecutive times.

 

• There was a lack of spot goods, meanwhile, chemical factories in Taiwan has delayed the shipping period due to the unsmooth delivery. As a result, the uncontrollable factors has increased the burden towards tense supply.

 

The above factors have facilitated the growth of ABS, it has reached the highest position, USD2018, of the year on 13^th August. Nevertheless, the growth was related to the oil price and monomer, while the reduction was related to the followings:

 

• Since the lower-half year, both the oil price and the monomer price went low. The SM monomer, accounting for 60% of the synthetic item, has reached the lowest point in recent five years, which has weakened the support towards the cost of ABS.

 

• The lowered factory price by chemical factories has clarified the reduction direction of the market. Simply in November, the chemical factories have accumulated USD90 of the lowered price, this has even affected the market selling price.

 

• The traditional peak season was coming to the end, the downstream demand has reduced while the oil price monomer fell back, and thus, the market is looking forward.

 

The oil price monomer has fallen continuously, the chemical factories then lowered the factory price at the same period. Plus, customers have fewer demand, traders then ordered goods more cautiously. Besides, due to weather condition, the shipping period was often affected. Therefore, the supply has supported the market price of ABS, which helped maintaining upon the production cost.

 

 

 

 

 

GPPS

Figure 10：The comparison of spot price and cost in GPPS market（2013-2014）

 

Source: HK Traders

The cost of GPPS in the graph is SM (Styrene) +US$120. It hasn’t included expenses like terminal handling charges.

 

 

 

Table 5: GPPS fluctuation（2013-2014）

	2013 average	2014 average	2014 Vs 2013
GPPS Spot Price	USD1861	USD 1672	↓10.2%
GPPS Cost	USD 1806	USD 1606	↓11.1%

 

In recent years, the movements of GPPS spot goods market price and production cost were close. The highest value of 2014, USD1817, has appeared at the beginning of the year. It was stable before August, yet it then fell slowly at the fourth quarter, the return rate of the market price was not as rapid as the cost due to the following reasons:

 

• The required SM monomer materials were prepared for plastic raw material production in chemical factories, thus, the return of cost was yet to be presented on the factory price, which has led to a high replenish cost for traders.

 

• Chemical factories modified production according to market changes under the condition of reducing demand, the also controlled the production capacity though selling was difficult in order to meet market demand and supply, and this has stabilized the price as well.
• Traders took orders conservatively according to the market situation, they tried to avoid the accumulation of reserves, which has limited the quantity of spot goods in the market.

 

When the GPPS reaches a certain high, there would be pressure regarding the connection of downstream demand. Since the current production value of part of the products produced by GPPS is relatively low, this has formed a hedge between the original mode and capacity of GPPS and the weak market demand. The supply-demand relationship of the market has stepped into a balanced situation, the average value of the year was USD1672, which has fallen 10.2% comparing with the previous year.

 

PP

Figure 11：The comparison of spot price and cost in HOMO PP market（2013-2014）

 

Source: HK Traders

The cost of HOMO PP in the figure is calculated by C3 (Propylene) +US$150. It hasn’t included expenses like terminal handling charges.

 

 

Table 6: HOMO PP fluctuation（2013-2014）

	2013 average	2014 average	2014 Vs 2013
HOMO PP Spot Price	USD 1541	USD 1574	↑2.1%
HOMO PP Cost	USD 1488	USD 1430	↓3.9%

 

In 2014, the interaction between the market price of PP and the production cost was obvious, the market price has increased to USD16522, the highest point of the year, and then reduced, which has formed a trend of first rise next fall. The average value of the year has risen 2.1% comparing with the previous year. This was the only increasing material among ABS, PS and PP, the key factor relied on the relationship between supply and demand:

 

• In April, there was an error in C2 cracking plant in the Middle-East, which has directly affected the production of C3. The reduction in monomer production capacity has impacted the capacity of PP chemical factory with limited cracking plants in the Middle-East.

 

• At the middle of the year, the transparent and synthetic PP produced in Korea has caused a great reduction in supply quantity to the South China region since the chemical factories sold over half of the production units towards European regions with feel-good demand and policy.

 

• The C3 transportation channel of Gao Hsiung, Taiwan,exploded while the LCY chemical factory has terminated production for investigation, which has stopped manufacture and delivery, and thus, related goods were limited in the market.

 

• Currently, some of the industries require other raw materials during production. Since the price of PP is lower than ABS, it is relatively attractive upon cost reduction. This therefore enhanced customers’ activeness in using PP to replace the material, leading to a higher demand towards PP.

 

PP was supported regarding supply and demand, which caused a lower return rate in price than that of the cost in the lower-half year. The average value of the year was USD1574, there was a relatively huge distance with the production cost.

Chapter 2: Plastic Market Forecast in 2015

2.1 Imports of ABS/PS/PP

Figure 12：Import raw materials fluctuation in South China, East China and other regions (2014)

Source: the Customs

 

Figure 13：The comparison between the imports of the South China, East China and other regions（2014）

Source: the Customs

 

According to the import raw materials fluctuation in several regions and the comparison figures in 2014, the South China region had the largest import capacity. In November, the capacity fell in both South China and East China. Other than these two regions, the capacity increased in regions in the same month. This indicated that there is a growth in demand of raw material in other regions, and there will possibly be a further growth regarding total import capacity.

 

 

 

Figure 14：Raw materials and quantity imported to South China, East China and other regions（2014）

Source: the Customs

 

In 2014, the PP import capacity in South China and East China regions referred to 1534901 tons and 1499462 tons respectively. The South China region was merely around 35000 tons higher than that of the East China region, which indicated a small variation in terms of the PP import capacity between two regions, the ABS import capacity in South China was around 470000 tons higher than that in East China. Overall, the market has high demand towards PP, it is expected that the proportion of PP in the market will still be the prior among the four major materials in 2015.

 

Figure 15：Import raw materials fluctuation of traders and factories in South China region (2014)

Source: the Customs

 

The import capacity of factories was higher than that of traders in the South China region. Since August, the capacity of traders fell gradually and it reached the lowest position of the year in November. The capacity of traders reduced and returned during July to October, yet the capacity level in October was still higher than February.

 

Figure 16：Import raw materials fluctuation of traders in South China region (2014)

Source: the Customs

 

According to the import raw materials fluctuation of traders in South China region, the reduction of import capacity was mainly on PP during August to November, which showed clearly that traders were conservative in ordering PP in recent two months. A reduction in circulating capacity of PP spot goods may possibly appear a year later.

 

Figure 17：Import raw materials fluctuation of factories in South China region (2014)

Source: the Customs

 

From July to October, the reduction of import capacity in factories was mainly on ABS. The capacity of PP has experienced a relatively rapid fall and return in August, and then became stable with growth, which indicated a fine demand towards PP. Besides, there will be a quite great impact towards the capacity of ABS along with the end of the traditional peak season, it is expected that both low and peak seasons will greatly affect the import capacity of ABS in 2015.

 

Figure 18：Customs ports in Guangdong for imports（2014）

Source: the Customs

 

In 2014, the highest proportion of major custom ports in Guangdong referred to Huangpu port in 38%; coming next was Shenzhen port in 32%; Guangzhou port was the third in 15%. This reflected that the manufacturing industry concentrated in Guangzhou, Shenzhen and nearby regions, the Pearl River Delta had large demand towards plastic raw materials.

 

 

 

 

 

 

 

 

2.2 Global economy–Ups and Downs

Figure 19: PMI of China, the US and Eurozone（2014）

Source: Xinhua 08

＊China Official PMI- Jointly published by China Federation of Logistics & Purchasing and the National Bureau of Statistics

＊America ISM PMI- Published by the US Institute for Supply Management

 

At the beginning of 2014, the global major economic system PMI data had relatively large variation. At the end of the year, the economy of America, with rapid growth, has outperformed the other three major economic systems with a huge distance.

 

Figure 20：Growth of China, America, Japan and Eurozone (2014)

• In 2014, the annual GDP of China had a growth of 7.4%. According to China Economic Monitoring & Analysis Center, National Bureau of Statistics of China, 7.4% is a normal growth, it is expected that the GDP will maintain above 7% in 2015.

 

• In 2014, the annual GDP of America had a growth of 2.4%, although it was not a great force, the figure was still much better than most of the developed countries. International Monetary Fund (IMF) predicted that the America’s economy will grow 3.1% in 2015, which may first breakthrough 3% since 2005.

 

• The Japanese government has increased the consumption rate to 8% since April 2014, after that, the economy has experienced negative growth for two consecutive seasons, the domestic consumption and exports stagnated. Due to negative economic growth, Goldman Sachs has quickly reduced 0.1% of the actual GDP of 2014 of Japan. It is expected that the growth in 2015 will be 1.6%.

 

• According to Eurostat, European Commission, the inflation rate in the Eurozone was downturn in 2014, which the annual rate was lower than 1%. Organization for Economic Co-operation and Development (OECD) expected that the inflation in the Eurozone will be 0.6% in the coming year, which indicated that the European citizens had worry in future economy and they were less willing to consume. The organization proclaimed that the economy growth of the Eurozone was 0.8% in 2014, and it may possibly speed up to 1.2% in 2015.

 

China has a stable development obviously, and America is being steady gradually along with the growth of manufacturing industry, it is expected that the developing speed will be milder in 2015. Japan’s economy may appear sluggishness due to an increase of consumption rate. A series of limited currencies and financial policies, plus the weakness of exports, would possibly keep the Europe’s economy in a weak situation.

 

2.3 Statistical Results of Corporate Business Environment Survey

In order to understand current problems during development and direction of corporations at once, Sunta Chemical Limited has designed Corporate Business Environment Survey in December 2014. After statistical analysis, we have come up with a summary of current corporate business environment in 2014, as well as a forecast of the market in 2015.

 

Figure 21：Industry types of corporations

Among various industry types of corporations, the toy industry accounted for the largest proportion as 36%; coming up next referred to the domestic appliance, electronics and electronic appliance industries, indicating that the toy industry had a leading position in traditional manufacturing industry.

 

 

 

 

 

 

Figure 22：Reasons of ups and downs in order-taking (2014)

 

Corporations which claimed a reduction in order-taking accounted for 18%, and the major factor that affected order-receiving was a higher order-receiving cost, accounted for 11%. Corporations which claimed a growth in order-taking accounted for 49%, the reasons of growth were product quality, innovative design, corporation reputation and new emerging market, corporation reputation accounted for 15%, indicating that honesty, trust and reputation are vital elements in enhancing corporation’s competitiveness under the current corporation culture.

 

Figure 23：Growth in order-taking in corporations v.s. purchase mode of plastic raw materials and stocks maintenance (2014)

 

Among the corporations with increasing order-takings in 2014, taking reference from reserves for procurement had took the leading position, which has reached 31%.The most plastic raw material reserves maintenance time was within a month as 35%, indicating that most of the corporations took a short period in procurement plan according to the internal reserve situation.

 

Figure 24：Growth in order-taking in corporations v.s. industry

types (2014)

 

To summarize the growth of order-taking in corporations in 2014, the toy industry accounted for 42%, coming up next referred to the domestic appliance industry as 18%. This indicated that the toy industry has shifted to the supply side after a fierce competition with other industries, which represented that some of the customers in this category has maintained a steady demand towards materials in a certain extent.

 

 

 

 

 

 

2.4 Forecast of Plastics Market

Figure 25：Predictions of order-taking fluctuations v.s. industry types (2015)

 

 

 

 

 

 

Regarding the situation of great reduction of order-taking in 2015, corporations which considered there will be a growth accounted for 53%, considered as fair accounted for 35%, and considered a reduction accounted for 12%. In general, corporations have fine expectations towards order-receiving in 2015.

 

• The toy industry had the largest proportion, 20%, among the corporations which consideredthere will be a growth, the proportions of domestic appliance, electronics and electronic appliance industries were close. The toy industry required relatively large amount of ABS, while the kid material industry had an unobvious low and peak season, demand was stable.

 

• The domestic appliance and electronic appliance industries had fair order-taking in four seasons, the proportions that considered there will be a growth in order-taking were 9% and 6% respectively,the light industry had 2% in proportion. In general, most of the industries which use ABS as major material had an optimistic attitude towards 2015. It is expected that there will be a strong support in terms of the demand towards ABS in 2015.

 

• Most of the hangers industries used GPPS, 2% of the industry expected that there will be a growth in order-taking in 2015, 2% considered that there will be a reduction. Besides, the CD/DVD tape, and plastic fork and knife industries also required GPPS, these two industries considered the future order-taking as fair and reduction respectivelyin 2015. This indicated that some of the corporations are facing adversities under the high competitive pressure in the market, in a stable with reduction regarding the capacity towards GPPS plastic raw materials.

                                            

• Some of the daily domestic appliance industries required GPPS to manufacture products, those that considered the future order-taking as growth and fair were 9% and 8% respectively, only 2% of the corporations considered a reduction. In general, the domestic appliance industry had a relatively great confidence towards the coming year, it accounted for a larger support in terms of the GPPS demand.

 

• Apart from using ABS, most of the toy and kid products also required PP to manufacture. The domestic appliance industry had an unobvious low and peak season, the raw material capacity was stable. Apart from DVD tape corporations with a conservative attitude towards the order-taking capacity, most of the industries that use PP had an optimistic attitude in 2015.

 

• The domestic appliances, such as toiletries, food cups and some kitchenwares, required PP as major in materials. Under the assumption of manufacture technique and product nature that matches standards, some of the products has changed and used PP as substitudinal material so as to strive for cost reduction in a greater extent. In general, the demand towards PP would become greater.

 

Figure 26：Predictions of our company’s products in the market v.s. market situation (2015)

 

 

 

 

 

 

 

 

 

 

 

Corporations, which focused America as their prior market, had different attitudes, those that considered the market with an optimistic attitude had 53%, considered a stable trend had 39%. Most of the corporations which focused Europe as their major market, considered the market trend as stable. The three attitudes towards the Japanese market varied a little. Overall, the US market provided the greatest confidence to corporations.

 

 

 

 

Figure 27：Predictions of growth in order-taking in corporations v.s. types of

 

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