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November 15, 2019 10:02 AM

CPMIA: Auto, trade tensions bring down China machine sales

Steve Toloken
Plastics News Staff
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    Plastics News photo by Steve Toloken
    Dongping Su, the executive vice president of the China Plastics Machinery Industry Association, based in Beijing, speaks at K 2019 in Düsseldorf, Germany.

    Düsseldorf, Germany — China's plastics machinery industry saw sales drop 5 percent in the first half of the year as both a slowing auto market and trade frictions with the United States hit investment, according to figures released at K 2019 by a Chinese trade group.

    In an Oct. 19 event in Düsseldorf, the China Plastics Machinery Association said that sales dropped 5 percent to 31.7 billion Chinese yuan ($4.5 billion) in the first six months of 2019 and the industry's overall net profit sank 20 percent, to 2.8 billion yuan ($399.5 million).

    "The difficult situation has been greatly affected by the trade friction with the U.S.," said Su Dongping, executive vice president of the Beijing-based association. "It is also affected by the automotive sector."

    CPMIA hosted a discussion and business development meeting with plastics trade associations from Italy and the United States at K 2019.

    While officials reviewed the difficult current market conditions, Su said the association believes things will improve in 2020.

    China's automotive market has declined for 15 consecutive months, but there are signs car sales could stabilize in early 2020, she said.

    As well, she said infrastructure spending by the Chinese government and growing consumption of daily life products by China's 1.4 billion people could stabilize the market.

    The automotive industry's trouble in particular hurt China's domestic injection molding machinery industry, the largest segment of plastics equipment, she said.

    CPMIA reported that imports of injection molding machines declined 16 percent in the first half of the year and exports dropped 5 percent.

    "Auto is the biggest reason for the decrease" in injection machine sales, Su said.

    Extrusion machinery and blow molding machines fared better than injection presses, however.

    Extrusion machines reported imports rose 1 percent and exports dropped 4 percent, while blow molding equipment reported growth: 2 percent for imports and 6 percent for exports.

    Overall, she said the first half of the year saw a worsening financial picture for the Chinese plastics machinery industry, with a rising number of machinery firms operating at a loss.

    In 2018, 83 of the largest 450 Chinese plastics machinery companies lost money, but in the first half of 2019, 112 reported losses, CPMIA said.

    The trade conflict with the U.S. hurt, since the United States is an important market for Chinese machinery exports.

    "The tariff policies bring great loss to the Chinese plastics machinery industry and the processors in the U.S.," Su said.

    The Chinese figures on a decline this year match those reported by other large plastics machinery associations at K.

    At the CPMIA event, Mario Maggiani, secretary general of the Italian Amaplast machinery association, said that Italian machinery production dropped 8.5 percent in the first half of 2019 to 4.3 billion euros ($4.7 billion).

    He attributed the drop to a slower economy in Europe, the economic fallout from the U.S. trade conflict with China, sanctions on Iran and Russia and environmental questions about plastics.

    Maggiani said the drop in some ways should not be too big of a surprise, coming after seven years of growth. Su echoed that point for the Chinese economy.

    Even with the current downturn, Su presented CPMIA figures that showed China's plastics machinery industry grew from 26 billion yuan ($3.7 billion) in 2009 to 67 billion yuan ($9.5 billion) in 2018. Exports rose from 3.7 billion yuan ($527.9 million) in 2009 to 7 billion yuan ($1 billion).

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