China Plastic Pipe Industry Brief PIM 201404

Review of China’sPlastic Piping Industry April 2014 © 2014 PIM Ltd. All rights reserved. No part of it may be circulated, quoted, or reproduced without prior written approval from PIM Ltd. quoted. serious over capacity has been observed in the seemingly homogenous ordinary hard plastic PVC pipes in recent years • The market shares of PE and PP are projected to grow in the near future Application • Municipal drainage and sewage disposal. anticorrosion properties Pricing Comparison • Plastic pipes show obvious cost advantages compared with metal pipes. heating. agricultural irrigation and drainage are the main application fields for plastic pipes in China • High potential applications can be identified in wastewater treatment. • The market is projected to keep growing over the next five years at a rate of less than 10% Product Category • PVC took more than half of the plastic pipe market.Summary Market Overview • China’s output of plastic pipe reached 12. especially in large diameters Major Players • Most of the manufacturers are small and medium sizes. industrial consolidation is expected © 2014 PIM Ltd. however. with limited production capacity and lessadvanced technology • To meet the needs of improving quality and the disparate competing players. gas. 2 . or reproduced without prior written approval from PIM Ltd. however the nationwide production capacity was more than twice the output for the same year. heat-resistance. No part of it may be circulated. All rights reserved. communications and mining sectors for the plastic pipes with better performance in wear-resistance.1 million metric tons in 2013. 2 0.8 2007 2008 2009 10 8. China’s output of plastic pipe kept increasing to reach 12. China Plastics Piping Association (CPPA) 3.Output As the world’s largest producer and consumer of plastic pipe.5 4. PIM research and analysis © 2014 PIM Ltd. 3 . with the combined factors of slowing down of the housing demand of urbanization.3 0. Chinese plastic pipe manufacturing industry is facing serious overcapacity Output Growth of China Plastic Pipe (Million Tons) 20 16 12 8 4 0 17. China Plastics Processing Industry Association (CPPIA) 2.1 0 Plastic Pipe Output Year-Year Growth 2018E • After becoming the world’s biggest producer and consumer of plastic pipe in 2010.4 0. quoted. up 10 percent from 2012 • The market is projected to keep growing over the next five years at a slower growth rate of less than 10%. expansion of rural drinking water systems and infrastructure spending • The nationwide production capacity is more than twice the output of 2013 • There is a serious contradiction between excess capacity and lack of high-end product supply and demand in current low-end plastic pipe products Source: 1.59 5.4 2010 2011 11 2012 12. All rights reserved.1 2013 0. No part of it may be circulated.5 0.78 3. or reproduced without prior written approval from PIM Ltd.1 million metric tons in 2013. there are still big gaps compared with the foreign products. 4 . quoted.Product Category A declining trend is predicted for the market share of low-end PVC pipe products in the near future Plastic Pipe Market Share. such as PVC-M. but. in the specialty base resins. manufacturing processes and finished pipe product qualities Source: 1. in the future. China Plastics Piping Association (CPPA) 3. while. or reproduced without prior written approval from PIM Ltd. China Plastics Processing Industry Association (CPPIA) 2. 2012 10% PVC 5% PE 30% 55% PP Others • PVC plays a dominant role in the market. PVC-O and PVC-C. No part of it may be circulated. All rights reserved. PIM research and analysis © 2014 PIM Ltd. PE and PP’s market shares are expected to increase because of the advantages of environmentally friendly production processes and high market application potentials • The over capacity is mainly found in the seemingly homogenous ordinary hard plastic PVC-U pipe. for the plastic pipes having a later market start. high and medium-pressure oil and gas transportation for offshore oil and gas fields • The penetration of plastic pipes in wastewater treatment.Application Municipal and agriculture applications took almost half of the plastic pipe consumption. high market potential is identified in the sectors requiring for better performance Application of Plastic Pipes in China 4% 8% 4% 2% 17% 10% 17% 10% 13% 13% Agriculture Municipal water supply Municipal drainage Building drainage Building water supply Sheathing Export Industry Ground heating system Others • The plastic pipes have widely applied in municipal drainage and sewage disposal. PIM research and analysis © 2014 PIM Ltd. quoted. communications and industrial areas • Further research and development are required for plastic pipes with wear-resistance. city gas delivery. or reproduced without prior written approval from PIM Ltd. communications and mining sectors will witness a fast increase in the near future due to the increasing demands Source: 1. All rights reserved. No part of it may be circulated. building heating systems. electric power. anticorrosion properties for delivering special mediums in mining. heating. China Plastics Processing Industry Association (CPPIA) 2. city tap water. agricultural irrigation and drainage. heat-resistance. building water supplies and drainage. 5 . China Plastics Piping Association (CPPA) 3. gas. 0 0 Source: 100 200 300 400 500 600 β-PPHdomestic(Yanshan) β-PPHimported(Borealis) Diameter（DN） PIM research and analysis © 2014 PIM Ltd.Pricing Comparison The obvious cost advantage of plastic pipes compared with metal pipes.0 FRPP FRP-PVC 1000.0 PPR PP-domestic PP-imported (AGRU) 1500. 6 . or reproduced without prior written approval from PIM Ltd. All rights reserved.0 0. No part of it may be circulated. quoted.0 PVC PE FRP 500.0 CPVC UPVC 2000. representing high demands in amenable working conditions Comparison of Piping Materials Pricing USD/Meter 2500. . PP http://www. Ltd PVC.lesso.php?tid=35 CHINA LESSO Group Holdings Limited PVC. Ltd PVC..com/en GOODY TECHNOLOGY CO. Ltd PVC. Ltd PE. Ltd PVC.com/ Zhejiang Weixing New Building Materials Co.atontech.com. PE http://www. PP http://www.com.Major Players Consolidation is expected to improve the disordered competitive market conditions Top Plastic Pipe Manufacturers Company Name Major Products Website Fujian ATON New Material Technology Co. PE http://en. All rights reserved.chuanlugroup. China Plastics Piping Association (CPPA) 3. Ltd PVC.china-pipes. quoted. PIM research and analysis © 2014 PIM Ltd..bspipe. however.com.000 to 10.com.asp Yonggao Co. about 6.000 tons and the top 15 companies represent about 25% of the total production capacity • Currently it is the transition period for consolidation.com/En/ Chengdu CHUANLU GROUP PVC http://www.cn/english/index.cnkaile. No part of it may be circulated.cn/list.. PE. PE. and having the best technology Source: 1. 7 . 000 manufacturers are engaged in the producing plastic pipes in China.goody.asp • In total. PE. PE..LTD PVC http://www.. there are only a few with capacity up to 10..com/english/index. China Plastics Processing Industry Association (CPPIA) 2.cn/ Nanya Plastics (Xiamen) Co. PE.com/en/index. or reproduced without prior written approval from PIM Ltd. PP http://www.era.nyxm.cn/ Hebei Bosoar Pipe Co. Ltd PVC.chinaust.cn/ Hubei Kaile Science and Technology Co. PP http://www.. PP http://www.asp Anhui Guotong Pipe Co.guotone.com/ Chinaust Group PE. as smaller and medium-size enterprises experience more problems of getting access to capital. PA http://www. PP http://www.com. rising labor costs. and detailed pathways to market decision makers as well as identifying and qualifying potential Chinese partners About us: PIM.Providing services for either buy or sell side parties -The leaders of both strategic research and acquisition advisory each have over 20 years of experience in Asian industries with a primary focus on China.pimchina. Want to learn more about PIM? Please visit www.com or write to [email protected] planning Cross Border Merger and Acquisition Consulting . All rights reserved. Ltd is a China focused industrial market strategic consulting firm offer We a variety of customized services for clients initially entering or expanding into China’s industrial sectors Our services cover: • Strategic Market Research . 8 .Market entry facilitation . or reproduced without prior written approval from PIM Ltd.com in Denver © 2014 PIM Ltd. quoted.Industrial and commercial market opportunity research . No part of it may be circulated.Target selection through to negotiating advisory .Introduction of PIM PIM can provide interested parties with customized opportunity analyses.com in Shanghai or marknewhouse@pimchina. com Website: www.pimchina. Shanghai 200020 China Office Phone：86 21 5466 7100 Fax line：86 21 5466 7110 Email: tomward@pimchina. 59 Mao Ming Nan Lu. Jin Jiang Complex.Thank You Address: Building 1 Suite 1361.com 9 .