Modified plastics refer to plastics that are processed and modified on the basis of general plastics and engineering plastics to make them have more superior properties such as flame retardancy, impact resistance, high toughness, and ease of processing.
The development of China's modified plastics industry first began in the 1990s. With the progress of global science and technology, the transfer of manufacturing industry centers to the country, the rapid growth of the economic environment and supporting policies related to plastics, the demand for modified plastics in China has been showing. With the steady growth trend, the modified plastics industry has been developing rapidly, and it has provided the main driving force for the development of the global modified plastics industry. Data show that the Chinese output of modified plastics reached 19.55 million tons in 2019, a year-on-year increase of 9.6%. As people's demand for modified plastics increases, the modification rate of plastics in China is also increasing, from 16.2% in 2010 to 20.4% in 2019.
Modified Plastic Industry Chain
The upstream of the modified plastics industry chain is the supplier of raw materials, and the cost of raw materials accounts for the vast majority of the total cost, as high as 90%. Therefore, the modified plastics industry is more sensitive to the market fluctuations of upstream raw materials, and the bargaining power of raw material supply is strengthened. Raw materials mainly include raw materials including petroleum-based resins and additives; the downstream industry is the application field. In the consumption structure of modified plastics, the demand for home appliances and automobiles ranks in the top two, with 40% and 37% respectively. Driven by the trend of lightweight automobiles and the improvement of people's consumption concepts, the home appliance and automobile sectors will significantly drive the market growth of modified plastics.
Household appliances are the area where the demand for modified plastics accounts for the largest proportion. Data shows that in 2018, the demand for modified plastics in the field of home appliances was 4.79 million tons, which are mainly used in common appliances such as air conditioners, washing machines, refrigerators, and televisions. The total amount of modified plastics used by the above four appliances accounted for the total amount of modified plastics in home appliances. Because modified plastics have excellent safety, environmental protection, energy-saving, antibacterial and other characteristics, they perfectly fit people's pursuit of a better life and are recognized by more and more consumers. With the upgrading of consumption and technological progress, the continued increase in the home appliance market will play an important role in the growth of the modified plastics industry.
Automobile Production Continues to Decline, And Emerging Markets Such as New Energy Vehicles Are Growing Rapidly
The automotive industry has become the main driving force for the growth of presumed plastic demand. Under the influence of Chinese economic development and changes in the automobile manufacturing industry, modified plastics have a certain relevance to the business cycle. As the biggest driving force for the growth of the modified plastics market, the automotive industry has seen a decline in output in the past two years, and the demand for modified plastics for vehicles has shrunk, which has a certain impact on the development of the industry.
In 2017, China's automobile production and sales reached its peak and continued to decline for three years. In 2020, the production and sales of automobiles for the whole year were 25.225 million and 25.311 million, down 2% and 1.9% year-on-year, respectively. The rate of decline was 5.5 and 6.3 percentage points lower than the previous year. Overall, the automotive industry has shown strong development resilience. Under the influence of global public health events in 2020, the automotive industry has shown a trend of first decline and then rise, and market growth has gradually resumed starting in April. Specifically, the sales of commercial vehicles have grown rapidly, and the first growth has been achieved; the overall sales of passenger vehicles throughout the year have been hit, showing a downward trend, but since September, the contribution of monthly sales of passenger vehicles has exceeded that of commercial vehicles, indicating Need to achieve rapid heavy volume.
Automobile Lightweight Brings Industry Endogenous Power
Automobile lightweight is an inevitable trend and important direction of the development of the automobile industry. Lightweight vehicles mean that under the premise of ensuring the strength and safety of the vehicle, reducing the weight of the vehicle to achieve the purpose of improving vehicle power and reducing fuel consumption. Data shows that a 10% reduction in car weight can increase fuel efficiency by 6% to 8%, and the trend of lightweight cars is very clear. The use of low-density plastic materials is one of the effective ways to achieve lightweight cars. Compared with metal parts, plastic parts can effectively reduce vehicle weight, reduce vehicle emissions, improve fuel economy, and reduce vehicle manufacturing costs. The amount of plastic used in automobiles has become an important measurement factor in automobile design and manufacturing. Driven by trends in the automotive industry, the demand for plastic products in the automotive market has greatly increased.
The amount of modified plastics used in Chinese vehicles is lower than that in developed countries in Europe and America, and there is still a lot of room for growth. Lightweight automobiles will increase China's demand for modified plastics. At present, the German vehicles that use modified plastics the most, the utilization rate of modified plastics is 25%, and the amount is 340 to 410 kilograms. The average level of European and American countries has reached 19%. The utilization rate of modified plastics for passenger cars in China is only 13%, and the modified plastics is about 160 kg, which is much lower than that of developed countries such as Europe and the United States. Therefore, the amount of modified plastics for Chinese bicycles still has a lot of room for growth.
With the continuous growth of Chinese demand for modified plastics, market participants continue to increase, but the scale of enterprises is generally small, most of the products are in the low-end market, most of them are in the imitating stage, independent research and development capabilities are insufficient, and profitability is weak. Products depend on imports. From the perspective of market share, the market share of foreign or consolidated companies is as high as 70%, especially integrated companies with large production scales and upstream resources.
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