Express Industry Benefited Plastics Industry Notably

Vigorously Developed Express Industry Benefited Plastics Industry Notably

Preface

In 2018, the express parcel exceeded 50 billion pieces, 50 times more than the 1 billion pieces in 2010. China’s express industry entered a new era of 1 billion each day, and China’s express packaging industry ushered in a major opportunity. According to relevant data, in 2018, the national express industry consumed more than 50 billion express orders, 5.3 billion woven bags, 24.5 billion plastic bags, 5.7 billion covers, about 14.3 billion packaging boxes and 43 billion meters of tape. The packaging tape used in China can wrap around the earth for 1,077 laps a year. The prosperity of China’s express industry has also greatly promoted the prosperity of the packaging industry.

Most of the materials used in the express packaging are plastic products. The rapid development of the express industry has brought new development opportunities to the plastics industry and will play an important role in the downstream demand for plastics.

According to SCI’s rough statistics, the package categories used in the express industry are shown below.

1. Adhesive Tape Jumbo Roll

The express packaging and the tapes used in our daily life are all BOPP-based materials, namely BOPP adhesive tape jumbo roll. 

The tape industry has been in development for more than 30 years since it entered China in 1983. China’s adhesive tape jumbo roll industry is currently at a relatively mature stage of development, and its productivity is increasing year by year. According to SCI, China’s adhesive tape jumbo roll capacity reached 3.2246 million mt in 2018, and the output was 1.8425 million mt. The apparent consumption volume was 1.3549 million mt.

At present, in China’s adhesive tape jumbo roll industry, the supply exceeds demand, and the supply still remain in an uptrend. According to SCI, many units are planned to be put into operation in 2019. From January to April 2019, there are 9 adhesive tape jumbo roll production lines newly added with nearly 45kt/a of production capacity. In the next 8 months of 2019, SCI confirmed that there would be 26 production lines new added, nearly 130kt/a capacity involved.

2. Express Demand Volume of Adhesive Tape Jumbo Roll

It can be seen from the data in the above table that the development of China’s express industry has been in full swing in the past ten years. During The 12th Five-Year Plan period, the number of express packages has increased by 10 times. With The 13th Five-Year Plan coming to an end, the number of Chinese express packages broke through 50 billion pieces again.

3. Express Packaging Materials for External Use – Recycled PE

The Express Packaging Materials for External Use and bubble film are made from recycled PE. One of the sources of recycled PE is from the PE offcut, accounting for 10% in recycled plastic resources. Another source is from PE scrap or recycled PE, taking a large proportion in recycled plastic resources.

China recycled PE supply & demand

As a broadly-used recycled plastic, the output, imported volume and demand volume of recycled PE have been grown year by year. In 2013, the apparent consumption of recycled PE was 8,946.7kt, increased by 2.5 times compared with that in 2006, and the average growth rate was 19.4%. Restricted by the tight import policy and the environmental inspections, both Chinese-made and imported recycled PE demand tightened. In 2018, the apparent consumption volume reduced to 3,596.9kt, and the average reduction ratio of the recent 6 years was -16.7%.

According to SCI, the most common grey express bag is mainly made from recycled PE LDPE colored superior granule, and most white express bags and bubble film are made from recycled PE LDPE first-grade white or second-grade white granule.

Backed by the downstream rigid demand, deals of recycled PE colored superior granule were passable, with relatively stable performance. From 2017 to 2019, the whole selling prices inched up. Earlier 2017, the price was RMB 4,600/mt. In mid-May 2018, the price reached a high level at RMB 5,950/mt. In mid-April 2019, the price was RMB 5,350/mt.

The recycled PE consumption on express bags has been grown year by year. According to the statistics from State Post Bureau, PRC, the 2016 express business throughput reached 313.5 hundred million pieces, and the total plastic bag consumption was around 147 hundred million. The 2017 express business throughput reached 400.6 hundred million pieces, up 27.8% Y-O-Y, and the plastic express bag consumption was 80 hundred million, with growth rate of 17.6%. According to the estimation, in 2020, China’s express business throughput is expected to reach 1,000 hundred million.

4. With Fast-Developing Express Industry, Plastic Industry Will Get Improved.

According to the statistics from State Post Bureau, PRC, the 2018 express development index is 92.9, and the 2019 express business throughput is expected to exceed 600 hundred million pieces, up 22% Y-O-Y, and the 2019 operating income is expected to exceed RMB 7,000 hundred million, up 18% Y-O-Y.

The sustainable development of the express industry will play an important role in the performance of plastic packaging industry.

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