Development Characteristics Analysis in the Main Consumption Fields of PE
Summary: Over the next five years, consumption of PE in non-durable goods such as daily necessities and packaging will be the primary focus for PE consumption growth in China. This growth will be propelled by an increase in the number of new entrants within the industry, stimulating a rise in PE consumption. Meanwhile, the use of PE in specialized areas such as wire and cable and UPE will benefit from the potential growth of new energy, making it the fastest growth point for PE consumption. As the demographic dividend gradually diminishes, the development in non-durable goods sector may come under pressure. Combined with the cyclical nature of macroeconomic development, growth in domestic PE consumption is predicted to first quicken and then slow down.
PE is mainly used in areas like packaging and daily necessities. Therefore, we conducted searches using keywords such as plastic, manufacturing, packaging, daily necessities, pallets, detergents and cosmetics, and pipe. We analyzed the collected data based on business continuity and longevity.
Distribution of Longevity of China PE Major Downstream Enterprises
Considering the longevity, the sizeable leading companies in the detergents and cosmetics industry are quite concentrated. The sector has seen sustained expansion in earlier years, with a high ongoing operational rate. Those with over five years longevity account for 71%. However, looking at the registration of new companies in the past three years, the proportion is relatively low. That is true for the pallet industry as well. This indicates that the industry is with high stability, with limited new entrants, while the internal competition is increasing. Future growth opportunities lie in the iteration and conceptual innovation of the processing units.
The plastic packaging and daily necessities sectors have a similar structure. Judging by the number of new entrants within 1-3 years, the entry barrier is not high. However, the proportion of daily necessities enterprises that have been in operation for over five years is less than 30%, indicating a high attrition rate in this field. Meanwhile, the proportion of packaging enterprises that have been operating for more than five years exceeds 50%, suggesting that, due to its frequent renewal demands, the packaging industry is likely to form large-scale companies that can resist external risks. It is a sector with low entry barriers and sustained demand support, and is expected to continue an upward expansion for new entrants in the next 3-5 years.
Distribution of Longevity of China Daily Necessities Enterprises
From a regional perspective, taking daily packaging as an example and using keywords such as "manufacturing," "plastics," and "daily packaging" to search in Tianyancha, we find several characteristics. Among companies that have been operating for over five years, 51.2% are in East China, followed by South China at approximately 29.5%, and then North China. This indicates that the three major consumer regions remain the primary drivers for main PE downstream products consumption, supported by large-scale or mature enterprises. Looking at the proportion of companies within 5 years, the ratio in East China remains high, but there has been an increase in the proportion in Northwest, Southwest, which is consistent with the trend of domestic manufacturing shifting from the coast to the inland over the past few years.
In summary, over the next five years, the consumption structure of key downstream industries of PE in China is expected to remain broadly unchanged. Among these, non-durable sectors such as daily necessities and packaging will be the main drivers for PE consumption, driven by an increase in the number of new entrants in the industry. Meanwhile, the use of PE in specialized areas such as wire and cable and UPE fields will benefit from the potential growth of new energy, making it the fastest growth point for PE consumption. As the demographic dividend gradually diminishes, the development in non-durable goods sector may come under pressure. Combined with the cyclical nature of macroeconomic development, growth in domestic PE consumption is predicted to first quicken and then slow down.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
