The year 2023 saw an unusual condition in summer, the traditional slack season for the pipe product industry. With the elimination of some backward small-size capacities, large-size pipe producers chose to grab the market share of non-standard plastic pipe, which was once the domain of small-size producers.
According to senior market insiders, the capacity proportion of small-size plastic pipe manufacturers in China has dropped from about 40% to roughly 30% now, while the output of non-standard products of large manufacturers has increased from less than 10% to 20% or so of its total output.
Capacity Utilization Rates of Main Plastic Pipe Products of Large-size Producers (Unit: percentage points)
Product |
Jul, 2023 |
Jun, 2023 |
MoM |
Jul, 2022 |
YoY |
PP Pipe |
54.91% |
54.73% |
0.18 |
44.30% |
10.61 |
PVC Pipe |
45.11% |
46.86% |
-1.75 |
40.67% |
4.44 |
PE Pipe |
31.81% |
32.47% |
-0.66 |
33.60% |
-1.79 |
Source: OilChem
Compared with 2022, in which the economy was greatly influenced by the pandemic, the production load of most pipe production enterprises improved in 2023 under the economic recovery, but the high cost and falling profit also weighed down on the pipe production, bringing growing elimination risks for small-size producers, which have low anti-risk capability.
In the middle and late stage of industrialization and urbanization, the demand contraction of construction and real estate industry is emerging, the increase of uncertain factors has also made economic operation more difficult, and the alarm of overcapacity has sounded.
As large-size plastic pipe producers gradually occupy the non-standard production market, scale production will become more and more common in the petrochemical industry.
Written by Ariel Guo, gq@oilchem.net
Edited by Navy Liu, liuchuanjun@mysteel.com