Two young men lay asleep atop a pile of woven sacks in the sultry summer heat. When a truck pulls up to their storefront, the proprietor appears to negotiate with the driver. Deal done, the young men awaken and scramble into action - loading a number of sacks into the truck - only to return to their slumber after the vehicle pulls away.
Welcome to China's version of a plastic resin supermarket. This scene is repeated day after day across China, mostly in the eastern and southeastern provinces, along the coastal waters of the China Sea.
These often are called ``plastic cities'' or ``plastic markets.'' Houston-based Townsend Polymer Services & Information has identified 25 large plastics trading markets. Sixteen are in the Shandong, Jiangsu, Zhejiang and Guangdong provinces. Another four are dispersed along the coast, while the remaining five are within China's interior.
The highly industrial Guangdong province, which processes about 25 percent of China's plastic resin per year, houses the most plastic markets, with six in the region.
In China, distributors sell most of the resin. Townsend's initial estimates put the number of distributors at trading markets at 9,000.
The markets can be storefronts along open-air streets or indoor buildings, similar to shopping malls. Distributors meet customers at their storefronts to negotiate sales, delivery and terms and, for smaller orders, load up their trucks, pushcarts or motorcycles while they wait.
The Chinese government establishes some of the plastics markets, which can be considered major construction projects since the government can obtain many local and national taxes from them. Markets range in size from 215,000 to 3.2 million square feet. The more modern markets typically are divided into a trading area, a warehouse area with the ability to store up to 220 million pounds, a processing area, and an area to accommodate visitors, such as a restaurant.
Two western China markets in Sichuan province are equipped with special railroad lines with loading docks so that distributors may receive resin and store it on-site. In eastern China, Jiangsu Changjiang Plastic Market offers rail service nearby to its tenants. Although some distributors ship resin by rail, much of China's resin continues to move by truck. Therefore, plastic markets are often near large highways.
Yuyao Plastics Chemicals Trading Mall (also known as China Plastics City) in Zhejiang province, near Hangzhou and Ningbo, has been the largest and most active plastic market for years, with more than 500 distributors.
More than a quarter of China's plastics converting industry is in the southeastern Guangdong province, near Hong Kong. Shunde Lecong Plastics Market is at the Pearl River Delta, near Guangzhou and Foshan. Foshan is home to the largest plastics processing industry base in China, including its largest plastics processor, packaging producer Foshan Plastics Group Co. Ltd.
Two years ago, the Shunde Lecong Plastics Market, which has operated for more than a decade, housed 80 distributors in 215,000 square feet, according to Townsend data. Today, some 500 distributors/traders occupy more than 3.2 million square feet in an open-air market that stretches for nearly two miles. In the course of a year, the companies there sell 2,000 different types of resin totaling more than 2.2 billion pounds. Through further development, the Shunde Lecong market in the next two to three years expects to overtake Yuyao China Plastics City as the country's largest plastic market.
Another developing market is Jiangsu Changjiang Plastics Chemical Trade Market, near Changzhou. A modern addition completed in October gives the market capacity to house 500 trading offices in nearly 2.7 million square feet. It is adding a 21-story business center and projecting sales of 4.97 billion renminbi ($600 million).
In western China's noncoastal areas, two big plastics markets, in Chengdu and Chongqing in Sichuan province, have been active for almost two years and provide rail lines to distributors. In Chongqing, a large municipality by area and population, resin consumption exceeds 440 million pounds a year. Distributors located at the city's plastic market claim to sell 90 percent of the resin consumed in the region.
Townsend - via its Beijing-based partner All China Marketing Research Co. Ltd. - has begun surveying hundreds of China's distributors and converters each month to understand their purchases, transaction prices, consumption, inventory, operating rates and logistics. The company publishes data from these surveys in its ``Plastic Market Monthly China'' reports.
If current trends continue, the amount of resin passing through the hands of China's distributors will increase, with much of it housed in plastics supermarkets.
Moore-Jones, vice president of continuing services for Townsend Polymer Services & Information in Houston, oversees the consulting firm's new ``PMM China'' reports.