To impose a 25% tariff on US-made PCs and PAs | How much influence does it have on the domestic market?

Foreword: Recently, the trade war between China and the United States has become the focus of public opinion. I believe everybody has heard of it. The counterattacks of both parties are also continuously expanding their influence. For the United States to violate international obligations in an emergency caused by China, in order to defend China’s own legitimate rights and interests, in April On the 4th, the Ministry of Finance announced that the Customs Tariff Commission of the State Council decided to impose a tariff of 25% on 14 categories of 106 products, such as soybeans, automobiles, and chemicals originating in the United States, involving a total amount of US$50 billion imported from the United States in 2017. Among the 106 commodities with imposed tariffs, LDPE, PVC, PC, PA-6, PET, acrylonitrile and other commodities are among them.

Today we focused on analyzing the impact of this trade war on PC and PA.

(I) Impact on the increase of tariffs on US-made PCs

In 2017, China’s dependence on PC imports was approximately 79%. The United States is second only to South Korea, Taiwan, and Thailand. It is the fourth largest country for China’s PC import source countries, and the total PC imports from the United States exceeded 100,000 tons in 2011-2017. , accounting for less than 10% of total domestic PC imports. In 2017, China’s dependence on US PC imports was 5.8%. Of the trade methods used to import US origin PCs, feed processing accounted for 82.35%, and general trade only Accounting for 4.76%.

In summary, the increase in import tariffs on PCs originating in the United States will have a more positive impact on the PC industry in China than in the bad market: In the next three years, domestic PC companies will intensively construct and build, which will increase the supply of domestically produced materials at that time and the competition in the domestic market will become more intense. To impose tariffs, but to a certain extent favor domestic PC industry, short-term look at the market gap is conducive to the domestic Zhejiang Steel Gale, Luxi Chemical, Wanhua Chemical and other new PC companies to sell, in the long term will also benefit the development of the domestic PC market.

(2) Impact on the US-made PA-6 tariff increase

From the above figure, we can see that China's import and export of PA slicing from the United States has a limited number of trades, and the amount of caprolactam import and export trade of PA6 upstream raw materials is basically negligible. Therefore, overall, trade war seems to have little effect on PA.

However, mention of PA products, had to think of PA66 upstream raw materials adiponitrile and hexamethylenediamine, the global supply of adiponitrile-hexamethylenediamine was highly monopolized by a few companies such as the United States Invista, Oswald, etc. In the long run, if The continuous escalation of trade war between China and the United States, whether it may lead to the United States restricting the export of adiponitrile-hexamethylene diamine, or China restricting the import of such raw materials, has to wait for the development of the follow-up trade war.

In addition, from the point of view of products imported by the United States to China, tariffs include more than 100 products such as electronic telecommunication equipment, new energy vehicles, furniture, and toys. Although they are not directly related to plastics, they involve the downstream products of plastic products. China exports to the United States The machinery, equipment, instruments and spare parts accounted for 48%; textiles, plastics and rubber products accounted for 10% and 4% of the total export volume to the United States in China. Electronic telecommunications equipment, toys, new energy vehicles, furniture Etc. As part of the plastic end product, if the United States imposes a tariff, it will inevitably affect its export volume and increase the pressure on domestic plastics manufacturers.

Let's look at the current PC, PA market conditions

PC

The decline in the domestic PC market slowed markedly last week. It is understood that the current situation in downstream operations has not significantly improved, and the outlook remains cautious for bearish outlooks. It is supported by centralized repairs on the device surface. The middlemen are currently stabilizing their intentions, and the outlook is cautious. Confusion. The buyers and sellers are confrontational and the market is in a stalemate.

PA

At present, the market atmosphere of PA6 is anxious. The performance of supply and demand fundamentals is not satisfactory. The pressure on the polymerization plant has not been reduced. However, after the inventory level of individual factories has declined, it has begun to show a desire for upward adjustment. The market conditions are temporarily weak and stable. The short term of the short-term PA6 market is expected. The quotation decreased, some of the polymerization factories tried to push up the offer, but the high turnover was still weak.

The PA66 market remains high and stable. The cost of the polymerization plant is supported. The inventory level of the factory is not high. The market conditions are relatively stable. Downstream orders are followed up as needed. The short-term PA66 market is expected to remain high, intra-market quotes are confusing, and the former futures sources are confusing. The price is relatively low.

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