Inorganic salt: changes in export environment

China is the world’s largest producer, consumer, and exporter of inorganic salt products. However, this year, news of the unfavorable export of inorganic salt industry has come one after another: In March, the US Department of Commerce made some phosphate products for China. The preliminary ruling decided to levy a countervailing duty of 109%. In May, India made an initial anti-dumping ruling against China's sodium tripolyphosphate, and levied tariffs ranging from 0.294 to 0.671 US$/kg for different companies. On the 15th of the month, China will cancel the export tax rebate for some chemical products, involving a large number of inorganic salt products; and exchange rate changes will bring greater uncertainties to the export of inorganic salt industry. Under such circumstances, the inorganic salt industry should face changes in crisis, adjust product export strategies, and develop in a refined and specialized manner.
According to statistics from the China Petrochemical Federation, the import of inorganic salt was 4.281 million tons in the first half of the year, a year-on-year decrease of 15.9%; the import amount was 43.63 billion US dollars, an increase of 60%. The export volume of inorganic salt was 7.754 million tons, an increase of 11.2%; the export amount was 5.19 billion US dollars, an increase of 52.7%.
Zhao Zhiping, director of the Information and Marketing Department of the China Petrochemical Federation, said that among the export products, phosphorus chemicals and fluorochemical products are mostly in the market, but there are many product types, small quantities, and dispersion, and fluoride and other processed products replace the former ore and other resource types. Products are exported. For this phenomenon, Zhao Zhiping analyzed that these changes are the result of structural changes in the industry's transformation of economic growth patterns.
Ye Haiting, president of the China Inorganic Salt Industry Association, believes that the export situation of the inorganic salt industry in the first half of the year is not bad. However, for the export enterprises of the inorganic salt industry, it is a few happy families. In the first half of the year, the total volume of import and export trade of Bengbu International Trade Co., Ltd. was 291 million US dollars, an increase of 39% over the same period of the previous year. Among them, the export volume of phosphate compound fertilizers and phosphorus chemical products increased by more than 30%. The Southwind Import and Export Company exported more than 20 million U.S. dollars in the first half of this year. The main export products are Sodium Sulfate, Sulfuric Acid Sulfur, Sodium Hydrosulfide, Antimony Chloride, and Barium Sulphate, which showed a declining trend year-on-year.
Facing the complicated economic situation in the second half of the year, Zhao Zhiping predicted that the total amount of imports and exports of the inorganic salt industry will increase this year, and imports will be much larger than exports. Affected by macroeconomic policies, the export of inorganic salt industry will decline, but because the chemical industry is an accessory product, the inorganic salt industry is even more so the inorganic salt industry's response to the RMB exchange rate reform will be slower, I am afraid it will not be apparent until the fourth quarter.
Ye Haiting believes that the inorganic salt industry has not been booming due to rising raw material prices. Policies such as the RMB exchange rate reform will have a greater impact on enterprises that are mainly exporting resource-based products or have a single export product, because these enterprises have poor anti-risk capabilities. In the short term, the New Deal is equivalent to an increase in export costs for enterprises, which may reduce or delay export products for low-profit or flat companies.
Ye Haiting took phosphorus chemical products as an example to explain that at present the export of phosphorus primary products is oversupply, and the exchange rate reform of RMB and the cancellation of export tax rebates have hit the export-oriented small and medium-sized phosphorus chemical companies to a certain extent, which is conducive to industrial integration in the long run. And the healthy development of the industry. Hubei Xingfa Group was included in the export tax rebate adjustment of sodium hypochlorite, sodium monofluorophosphate, industrial sodium hexametaphosphate and sodium acid pyrophosphate, etc., which are mainly primary or low-end products, currently in the Hing Fat Group The proportion of product composition is already very small, which weakens the impact of canceling export tax rebate policy on enterprises.
Both Zhao Zhiping and Ye Haiting believe that the pace of national policy adjustment, industrial restructuring, and changes in the mode of economic development are consistent. They are conducted in the direction of low-carbon energy conservation and elimination of backward production capacity, and will force related companies to dig deep into their internal potential. We will carry out structural adjustments to absorb the factors that increase profits and reduce profits. At the same time, it will also help promote energy conservation and emission reductions of enterprises. Ye Haiting emphasized that although China is a major producer of inorganic salts, there are many types of products, many production processes, and many small and medium-sized enterprises. In the face of the changes in the market environment, the inorganic salt industry must change the mode of economic growth. It is necessary to regard the development of refined, specialized and high value-added products as the only direction.
Ye Haiting also pointed out that the refinement and specialization of enterprises depend on upgrading technological content and technological innovation. This requires time and needs. Inorganic salt companies should work hard to change the mode of economic growth, cooperate with scientific research institutes, and develop new products. Fufu Group is a successful case. High-end phosphorus products with independent intellectual property rights account for more than 30% of its total export volume, and have become the largest export trader in the phosphorus chemical industry.
Ye Haiting revealed that some enterprises have already achieved exports to domestic sales, and have also developed markets in South America, Africa, or Southeast Asia. ASEAN is especially a big market worth exploring. The China-ASEAN Free Trade Area has been fully launched in early 2010, and ASEAN should become a key area for the “going out” strategy of inorganic salt companies. After the implementation of zero tariffs in the China-ASEAN Free Trade Area, it reduced the expenditure on tariff links and reduced operating costs, which is a boon to the export of inorganic salt industry. It is reported that enterprises such as Jifu have set up companies or offices in ASEAN to further expand the business of import and export with ASEAN. It is understood that the volume of trade between KF and ASEAN has increased at a rate of nearly 20% in recent years.
In response to policy changes, some companies stated that on the one hand, the prices of export products will be adjusted, and on the other hand, the structural adjustment of export products will be accelerated. Since there are still export tax rebates for high-end products, companies must increase their exports to this group of goods and reduce the export of low-end goods. At the same time, the company will also make adjustments in its sales strategy in an effort to minimize the negative impact of export tax rebates.

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