Many Enterprises Lamented That Orders Suddenly Disappeared!

Aug 16, 2022

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In the past may and June, the heads of several modified plastic new material enterprises lamented that “orders suddenly disappeared”. It is understood in detail that the “sudden disappearance of orders” is a common sigh of the plastic industry and a problem faced by most people in all walks of life. Most enterprises feel great pressure. So, what happened to domestic manufacturing?

An industrial zone in Huangjiang, Dongguan, closed down seven factories in June. In May and June, the orders of a factory owner declined seriously, and the total startup time was less than 10 days. But in July, all employees took a long holiday, and he stayed in the factory alone. He pointed to the ceiling of friends who came to drink tea and said, “I heard the noise of machines upstairs before, but now the roof is quiet, and it is estimated that I can’t stand it anymore.” a helpless expression!

The relevant responsible person of a town government in Dongguan convened a forum for operators of relevant industries and frankly stated that “the GDP increased by 30% from January to May of last year, but decreased by 8% in the same period of this year, which is close to 40 points. We hope that the government and enterprises can strengthen exchanges and jointly face and tide over difficulties.”.

Many product manufacturing enterprises in the Yangtze River Delta and the Pearl River Delta are facing the same problem. The closure of several factories before the Dragon Boat Festival in Zhongshan is not a big news. The decline in sales volume of domestic manufacturers, including many electrical appliance manufacturers, has been reflected in the semi annual report of listed companies. One of the top three electrical appliance manufacturers reported that thousands of people had been laid off, but according to people in the industry, it is unknown which round of layoffs it is.

While the orders of the production and manufacturing plants are reduced and the operation is insufficient. Although it is a hot summer, the upstream plastic industry has deeply felt the cold wind.

Rubber raw material Trade:

A plastic raw material agent in Zhangmutou, Dongguan, adjusted its energy this year, focusing on the development of the factory and no longer pursuing sales. Instead, it said with a smile that “it is more difficult to collect money than the customers of the development factory this year”. In the first half of this year, the sales volume of traders fell seriously, and the drop in the price of inventory materials made the plastic people even more worried. Taiwan Chimei ABS material pa-757 of a trader in Changping had a purchase cost of 21000 yuan in the second half of 2021. It has been falling in price and has not been sold. At present, one ton has lost 6000 yuan. Recently, the price of PC materials has also dropped 3000 feet, from NT $20000. Recently, Lotte 1100 in South Korea reported 16200, and Chimei 110 in Taiwan reported 16300.

Production of modified plastics:

Most of the modified plastic production enterprises are facing a serious decline in orders, a serious shortage of work, and a precipitous decline in sales. A modified plastic manufacturer in Qiaotou, Dongguan, has defaulted on the factory rent for two months. It is expected that there will be orders for production in July to repay the factory rent. Due to insufficient operation and high production costs, the operator of the enterprise claims that “there is no BMW every month!”.

Domestic petrochemical plants:

After experiencing the bull market in 2020, the upstream petrochemical plants generally entered a loss state in 2022, and the startup rate and production capacity declined seriously. The war between Russia and Ukraine led to a sharp rise in crude oil and a generally high cost of monomers. Under the high price of monomers such as styrene and bisphenol A, petrochemical plants were very cautious in starting production. The plastics produced by high-priced monomers were not accepted by the downstream, and the demand was sluggish. The difficulty in shipping was even worse. The rise of domestic plastics has caused the supply of plastics to be seriously greater than the demand this year. According to the statistics of plassnet, plus the production of PCs in many petrochemical plants including Hainan Huasheng and Henan Shenma this year, the production capacity of domestic PCs has exceeded 4 million tons this year and is expected to exceed 5 million tons next year. ABS, including Guangxi Changke, was put into production, and the increase in production capacity was also part of the reason for the decline in plastic prices.