Chlor-alkali industry is facing new challenges in 2009

In the new year, people face many expectations in the face of a persistently weak market. Macroeconomic policies have established a “preserving growth” dominance, and new policies have been introduced in terms of credit, fiscal and taxation, and foreign trade, and have gradually begun to be implemented. However, for the chlor-alkali industry, it still faces a severe test, and companies need to take precautions and respond positively.
1. The country will take active measures to promote the rapid growth of consumption, thus creating a good environment for the growth of consumer products such as food and beverages, pharmaceuticals and home appliances. However, the rise in consumer demand is a long-term, slow process, and it is difficult for related industries to have explosive growth. This pull effect will take a while to pass from the basic consumer products sector to the upstream raw material industry. The corporate response measures should be continuous.
2. As the chlor-alkali industry as an energy-intensive industry, the uncertainty of its upstream raw materials remains. Since January 1, 2009, the National Development and Reform Commission lifted the provisional price intervention measures for electric coal as stipulated in Announcement No. 46 of 2008. At the same time, the Ministry of Finance and the State Administration of Taxation issued a notice to stipulate that since January 1, 2009, the value-added tax rate for metal mining products and non-metallic mineral products will be restored from 13% to 17%. Coal prices and salt prices also have upward pressure. After the international oil price dropped to around US$40 per barrel, there was limited room for further declines. It is initially expected that the annual price of WTI crude oil futures in the New York market will average around US$60-80 per barrel. The ups and downs of crude oil prices have had a certain impact on the market structure of the calcium carbide process and the ethylene process. In the coming period, the import of raw materials, PVC imports, etc. will remain the focus of attention.
3. The foreign trade environment is full of challenges. As the financial turmoil has caused trade protectionism in the United States and Europe to rise, the risk in the export market has increased. At the same time, the shrinking of demand in Europe and the United States and the persistence of problems such as the exchange rate of the renminbi also pose a test for exports. However, with the substantial fall in the prices of basic energy and raw materials, the reduction and elimination of export tariffs, and the substantial increase in the export tax rebate rate, it will also provide a certain amount of room for the price of export commodities.
4. The pressure on environmental protection has only increased. The Ministry of Environmental Protection issued a notice on the "China's Catalogue of Toxic Chemicals with Strict Restrictions on Imports and Exports" (2009). All imported or exported toxic chemicals in the catalogue should apply to the Ministry of Environmental Protection for the registration of environmental management certificates for the import of toxic chemicals. Notice of Environmental Management Release for Imports and Exports of Toxic Chemicals. This includes products such as EDC, methane chloride, and trichloroethylene. From the long-term analysis, the state will increase the industry consolidation of relatively high ratio of energy value to output value and output value. With the phasing out of backward production capacity and the acceleration of industry consolidation in these industries, leading enterprises with economies of scale, energy saving and consumption reduction will fully benefit.

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