The depreciation of RMB affects the import and export trade of plastics industry
The depreciation of RMB affects the import and export trade of plastics industry
Since August 11, the central bank has decided to improve the RMB central parity rate. In general, the devaluation of the RMB has a certain effect on the import of China's plastics industry in the short term, which will make it more difficult to sell imported materials. But with ample domestic supply, companies should improve their competitiveness and seize the opportunity to promote steady growth in exports.
Impact on the plastics industry
The most direct impact on the plastics industry is the import and export trade. In recent years, with the domestic new increase capacity, plastic industry import dependency, but for some high value-added materials mainly depend on import in commodities circles is still belongs to a part of high import dependency. The depreciation of the yuan will increase the cost of procurement for imported enterprises, but also stimulate the export of downstream products.
In recent years, the contradiction between the oversupply of plastic market has become more obvious, and the recent market weakness has been sluggish. In the case of depreciation of RMB, the purchasing power of imported raw materials will decrease correspondingly. Because depreciation, the recent import goods to the port of the has the obvious effect, the increase of the cost of imports and merchants to late order risks have increased, such expectations for traders to place an order for the future product will be reduced. Moreover, because of the cost of imported goods increase, in the domestic market competitiveness will be weakened, will cause less demand for imported raw materials, downstream users to find alternative to domestic raw materials, to strengthen the price competitiveness of domestic plastic raw materials. This is good for the domestic plastic market.
Finally, for export-oriented enterprises, the depreciation of RMB is a contributing factor. Despite the small export volume of domestic plastic materials, there is little impact on the current or depreciation of the RMB. But overall, it is also a positive result of economic gains. On the other hand, it also stimulates the export of the downstream plastic products, and correspondingly increases the demand for raw materials.
Hit commodity markets hard
Demand for commodities such as crude oil and precious metals has been brisk, sparking a long bull market in commodities. But now that the Chinese economy is under increasing downward pressure, commodities are clearly under pressure. The renminbi tends to be in sync with commodities, which has made the already weak commodity market even worse. For the oil market, a weaker yuan means that Chinese crude imports are more expensive, thus curbing oil consumption, exacerbating market demand and supply. In general, the rapid depreciation of the yuan has made the oil price worse, and the weak pattern continues.
