China’s plastics and rubber demand ‘to grow by 10% in 2010’

20 April 2010 16:27  [Source: ICIS news]

SHANGHAI (ICIS news)--China’s plastics and rubber demand growth will exceed 10% this year amid a strong economic recovery, particularly driven by the automobile market, industry sources said on Tuesday.

“China’s domestic consumption has endless potential, so I am very confident for this year’s growth. A 10% growth target has no difficulty basically,” Liao Zhengpin, chairman of the China Plastics Processing Industry Association (CPPIA), said on the sidelines of Chinaplas 2010.

Packaging and construction materials were still the main forces driving plastics consumption. Additionally, plastics usage in medical equipment was burgeoning, Liao said.

“Plastics industry growth is always higher than the economic growth these years,” said Stanley Chu, chairman of Adsale Exhibition Services, the organiser of Chinaplas 2010. “China’s gross domestic product [GDP] is expected to expand at 9.5% in 2010, so there is no problem that this year’s growth will be higher [by] 10% on the back of the economic rebound and recovery.

“Automobile, electrical and electronics, construction materials and packaging are still the fastest-growing downstream sectors and they consume large volumes of plastics,” Chu added.

Visitors and producers attending this year's Chinaplas said their businesses were performing better on a year-on-year basis and they were hoping that prices would not be as volatile as they were last year.

“The polyvinyl chloride [PVC] market this year is expected to outperform the polyolefins market as the demand from housing and infrastructure sectors is very strong,” Chang Zongqi, an analyst from Shanghai-based Dongzheng Securities, said.

Futhermore, China’s rubber consumption was also likely to show 10% growth after experiencing a 8-10% increase in recent years in line with rising demand for tyres, said Mary Xu, deputy secretary general of the China Rubber Industry Association (CRIA).

“As long as China’s auto sales remain high, the demand for tyres will increase, finally leading a surge for rubber consumption,” Xu said.

China’s auto sales in March soared 56% year on year to 1.74m units, while they rose 72% year on year to 4.61m units in the first three months of the year, according to the China Association of Automobile Manufacturers (CAAM).

“The rubber demand will be very strong this year as the overseas economic bodies are gaining strength in recovery,” a rubber trader said.

Chinaplas 2010, an international plastics and rubber exhibition, runs from 19-22 April in Shanghai.

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By: Judith Wang
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