The industrial chain is accelerating its migration out of China! Exports are under pressure!
The U.S. chemical industry ranks first in the world. In recent years, the Sino-U.S. trade and global economic environment have been harsh. Europe and the United States have successively guided industrial chains to accelerate their relocation out of China, causing my country to drop from the first place in exports to the United States to the fourth place.
Among them, since 2023, due to the continuation of the Russia-Ukraine war and the worsening environmental deterioration, as of the first half of the year, the share of China's chemical products exported to the United States has dropped by 28.7% compared with 2018, and the industrial chain has mainly shifted to the EU, ASEAN and India.
Up to now, my country's export products are mainly accelerators, antioxidants, ammonium sulfate, diammonium phosphate, polymeric MDI, etc., accounting for 50%, followed by titanium dioxide, polyurethane, dyes, phosphorus chemicals, fertilizers and other products, accounting for 50%. 30%. Throughout 2022, the cumulative exports of my country's top 40 important chemical products exceeded 20 million tons, of which chemical products such as acetic acid, polyester filament, bottle-grade PET, and PTA exported more than 1 million tons.
Now that the U.S. market is shrinking again and moving to other countries and regions, my country's exports are under significant pressure. Data show that my country's chemical products have been poorly exported in recent years and profits have shrunk significantly.
Over 80% of raw materials are imported! Basic imports totaled more than 43 million tons!
In contrast, my country's imports of chemical products have only increased. Although my country ranks first in the world in terms of production capacity of more than 20 chemical products and has a relatively complete industrial layout, the structure of my country's chemical industry is still in a mid- to low-end situation, and high-end chemical materials, equipment, and technologies are heavily dependent on imports.
According to data, my country will still import and purchase a variety of chemical raw materials in 2022. Among more than 130 key basic chemical raw materials, 32% of the varieties are in the blank stage, and 52% of the varieties rely on imports.
In addition, there are more than 40 kinds of basic chemical raw materials that need to be imported and purchased, with the cumulative import volume exceeding 43 million tons, involving multiple industrial chains such as coal chemicals, olefins, and chemical fibers. It is worth noting that the import volume of PX and methanol exceeds 10 million tons, and the import volume of ethylene, propylene, styrene, pure benzene, etc. exceeds 1 million tons.
Double attack! The cost of imported raw materials may increase significantly!
The share of exports is still falling sharply, and it is difficult to find domestic chemical products for export. However, the domestic downstream market is recovering slowly, and many parties have focused on on-demand procurement. The industry is severely oversupplied, which may cause a large backlog of mid- to low-end raw materials, which will burden enterprises.
At the same time, due to the recent sluggish global economic growth, the U.S. dollar has continued to strengthen due to interest rate hikes, attracting a large amount of capital inflows into the United States, putting pressure on the RMB. The RMB has continued to depreciate, with the offshore exchange rate at around 7.3, hitting its lowest point during the year. Exchange rate changes will have an impact on the prices of imported raw materials and will cause an increase in import costs. The above-mentioned related imported products may be subject to upward pressure.
