Five major opportunities and three major challenges in the plastic products industry

At present, precision injection molds and precision injection molding parts have been deeply involved in many fields such as automobiles, home appliances and electronics, especially in the field of automotive parts. As 'plastic steel' becomes the development trend of automobile manufacturing, precision injection molds and precision injection molding parts have developed the fastest, and the most widely used market demand has also driven the development and renewal of precision injection molds and precision injection molding parts. In recent years, ultra-precision, micro-refining, new materials and complete sets of components have become the key development directions for precision injection molds and precision injection molded parts.

01 Opportunities Facing the Industry

(1) my country's industrial policy support

The excellent performance of plastic products is widely used in real estate, automobiles, household appliances, consumption, packaging, consumer electronics, medical devices and other fields, and its role in promoting national economic construction and improving people's material and cultural life is becoming increasingly apparent. In recent years, the Chinese government has formulated a series of industrial policies to support and promote the development of the plastic products industry towards high performance, high quality and environmental protection.

In January 2017, the National Development and Reform Commission issued the 'Guidelines for Key Products and Services in Strategic Emerging Industries (2016 Edition)', emphasizing the development of key basic components of intelligent equipment, including high-speed precision gear transmission devices. In June 2016, the my country Mold Industry Association issued the 'Outline of the Development Guidelines for the Mold Industry' '13th Five-Year Plan'. The self-distribution rate of domestic molds in the domestic market reached more than 90%, meeting the demand for mold products by the user industry development, and achieving medium and high-end molds (the proportion of the total mold is 60%). The development of emerging industries is imminent, and the proportion of medium and high-end molds has increased to more than 50%. In April 2016, the China Plastic Processing Industry Association issued the 'Guiding Opinions on the Development Plan of Plastic Processing Industry' 13th Five-Year Plan', allowing the plastic processing industry to grasp the development opportunities during the '13th Five-Year Plan' period, and closely focus on the technical direction of 'functionalization, lightweight, ecologicalization, and micro-forming' to create raw materials, advanced molding technologies and technologies.

Judging from the relevant policy analysis, my country emphasizes the need to strengthen the development of high-speed precision gear transmission devices, advocate the development of plastic products towards lightweight and miniaturization, and vigorously encourage the development of the mold industry and other industries.

(2) The downstream market space is vast

In recent years, domestic demand for plastic products has grown steadily due to the growth of industries such as automobiles, household appliances, consumption, packaging, consumer electronics, and medical devices. With further breakthroughs in material research, the application fields of plastic parts have been continuously expanded, expanding to fields such as aerospace, new energy, advanced manufacturing and new processing technologies, integrating with emerging industries such as smart home and the Internet of Things, and the plastic products industry has broad market development space.

(3) Continue to use plastic steel to advance

Plastic steel 'lightweight automobiles, thinning and fashionable home appliances' have become a major trend. For example, in the automotive field, plastic steel is one of the ways to develop automobiles' lightweight. Compared with traditional metal materials such as steel, plastics have the advantages of low price, light weight, easy processing, corrosion resistance, and self-lubricating. With the development and use of various new modified plastic materials, plastics have become close to traditional metal materials such as steel in terms of strength and other related characteristics. Modified plastics are increasingly used and accounted for a larger proportion in the household appliance and automobile industries, and have become the second type of material after steel.

(4) Opportunities for upgrading domestic manufacturing industry

The Chinese government has begun to vigorously promote the transformation and upgrading of the economic structure, turning our economy into a higher-quality growth path. my country has achieved an important position in the world industrial chain. The development of domestic manufacturing has driven the development of auxiliary industries, including the plastic products industry, and promoted the improvement of the overall level of domestic manufacturing. With the transformation and upgrading of the domestic economic structure, traditional manufacturing needs to develop in a direction of higher connotation and quality, promoting the continuous increase in demand for products with high technical content and added value, and providing new development opportunities for the domestic plastic industry.

(5) National income continues to grow

Over the past decade, my country has been one of the fastest economic growth economic blocks in the world and has maintained a high growth rate for a long time. With the increase in my country's economic growth and national income, the consumption capacity of urban and rural residents has also continued to increase. According to data from the National Bureau of Statistics, in 2021, my country's per capita gross national income (GNI) rose to US$12,400. According to the World Bank's 2020 standards, when the per capita gross national income (GNI) reaches US$12,696, it will be among the high-income countries. The median per capita disposable income of rural residents in middle-income countries is 16,902 yuan, an increase of 11.2%. The continuous improvement of national income level has provided sufficient growth momentum for the downstream market of the plastic products industry and driven the continued growth of downstream market demand. As an important part of the national economy, the plastic products industry has benefited from the continuous and stable growth of national income and has huge development potential.

02 Challenges facing the industry

(1) Changes in raw material prices

The main raw material in the plastic products industry is plastic particles. The price of plastic pellets is easily affected by many factors such as macroeconomic growth, strict environmental protection policies, fluctuations in oil prices, fluctuations in US dollar exchange rates, international and geographical reasons, but plastic products companies basically lack bargaining power for plastic pellet companies, and there is a certain lag in the price adjustment.

(2) Demand fluctuations in downstream industries

The plastic products industry has many product categories and strong industrial correlation, and is one of the important industries in the national economy. Affected by the slowdown in macroeconomic growth, the demand for end consumers of plastic products and end product manufacturers has a certain cyclical impact on the industry, and some industries such as the automobile industry have a decline in demand for a certain period. In this case, the industry is more competitive and profitability is facing challenges.

(3) High-end raw materials and high-end equipment rely on imports

The main raw materials of plastic products are general plastics, engineering plastics, special plastics and modified plastics. High-end raw materials such as special engineering plastics, modified plastics, plastic additives used in the domestic plastic products industry mainly rely on imports, and high-end equipment import dependence is relatively high. The low level of independent high-end raw materials and equipment is an unfavorable factor restricting the upgrading and innovative development of the domestic plastic products industry.