Analysis and Prospect of Import and Export Data of China's Chemical Industry in the First Three Quarters of 2024

1. first three quarters of import and export data overview

import and export data for the first three quarters showed that China's imports rose 0.3 per cent in September from a year earlier, lower than market expectations of 0.9 per cent and down from the previous value of 0.5 per cent; exports rose 2.4 per cent year-on-year, also failing to meet market expectations of 6 per cent and significantly lower than the previous value of 8.7 per cent. In addition, China's trade surplus in September was 81.71 billion US dollars, which was also lower than the market expectation of 89.8 billion US dollars and the previous value of 91.02 billion US dollars. Although still maintaining a positive growth trend, but the growth rate slowed significantly, failed to meet market expectations. In particular, export growth hit a new low this month, falling year-on-year to its lowest level since February 2024.

2. global slowdown on exports

in response to the sharp decline in the above-mentioned economic data, industry experts conducted an in-depth analysis and pointed out that the global economic slowdown is an important factor that cannot be ignored. The global manufacturing purchasing managers' index (PMI) has fallen for four consecutive months to its lowest level since October 2023, directly leading to a decline in China's new export orders. This phenomenon not only reflects the shrinking demand in the international market, but also has a significant impact on China's new export orders, making it face severe challenges.

3. Multiple Complicated Factors Lead to Export Dilemma

in-depth analysis of the causes of this "frozen" situation, we can find that there are many complex factors behind it. This year, the frequent and abnormal intensity of typhoon activities has seriously disrupted the order of maritime transportation, causing the congestion of container ports in China to reach the peak since 2019 in September, further aggravating the difficulty and uncertainty of goods going to sea. At the same time, the continued escalation of trade frictions, the policy uncertainty brought about by the U.S. election, and the deadlock in the negotiations on the renewal of labor contracts for dock workers on the East Coast of the United States, together constitute many unknowns and challenges in the external environment of trade.

4. chemical industry export performance is poor

these unstable factors not only push up transaction costs, but also seriously weaken market confidence and become an important external force restraining China's export performance. In this context, the recent export situation of many industries is not optimistic, and the traditional chemical industry, which is the pillar of the industrial field, has not been spared. According to the composition of imports and exports in August 2024 released by the General Administration of Customs, the cumulative export volume of inorganic chemicals and other chemical raw materials and products decreased significantly year-on-year, reaching 24.9 per cent and 5.9 per cent, respectively.

Impact of 5. Overseas Market Changes on Chemical Export

looking further at China's chemical export data in the first half of this year, among the top five overseas markets, exports to India fell by 9.4 year-on-year. Among the top 20 overseas market exports, the export of domestic chemicals to developed countries generally showed a downward trend. This trend shows that changes in the international situation have had a great impact on China's chemical exports.

6. chemical enterprises face operating pressure

in the face of the severe market situation, many companies reflect that recent orders have not yet shown signs of recovery. Many chemical enterprises in large economic provinces have encountered the dilemma of cold orders, and a large number of enterprises are facing the dilemma of no orders. In order to cope with the pressure of operation, enterprises have to take measures such as layoffs, salary cuts and even temporary suspension of production.

7. overcapacity and homogeneous competition

there are many factors that cause this situation. In addition to overseas force majeure factors and downstream market downturn, serious problems such as overcapacity, market saturation, and product homogeneity in the chemical market are also important reasons. These problems have led to vicious competition in the industry, making it difficult for enterprises to get rid of difficulties.

8. Seeking Breakthrough and Price War Risk

in order to find a way to break the situation, paint chemical enterprises in the surplus market to find a way out. However, compared with the time-consuming and huge investment in innovation and research and development, many enterprises still choose the "quick method" of price war and internal sales ". Although this short-sighted behavior can ease the pressure on enterprises in the short term, in the long run, it may aggravate the risk of vicious competition and deflation in the market.

9. market deflation risk appears

in fact, such risks have already appeared in the market. In mid-October 2024, the prices of a number of varieties in key quotation institutions in the chemical industry fell sharply, with an average decline of 18.1 per cent. Leading companies such as Sinopec, Lianhong New Materials and Wanhua Chemical have taken the lead in reducing prices, with prices of some products falling by more than 10%. Behind this phenomenon is the risk of deflation in the entire market, which requires great attention from both inside and outside the industry.

To sum up, China's chemical industry is facing many challenges and difficulties in the first three quarters of 2024. In the future, the industry needs to strengthen the innovation drive, optimize the industrial structure, and enhance the competitiveness of products to cope with the complex and changeable international market environment.