China's Packaging Materials Market Is Slowing Down Due to Weak Demand

IndexBox has just published a new report: 'China - Packaging Materials - Market Analysis, Forecast, Size, Trends and Insights'. Here is a summary of the report's key findings.

The revenue of the packaging materials market in China amounted to $69B in 2018, going down by -6.1% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers' margins, which will be included in the final consumer price). Over the period under review, the total market indicated buoyant growth from 2008 to 2018: its value increased at an average annual rate of +2.5% over the last decade. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period.

Based on 2018 figures, packaging materials consumption increased by +17.4% against 2016 indices. The pace of growth appeared the most rapid in 2017 when the market value increased by 25% year-to-year. In that year, the packaging materials market reached its peak level of $73.5B, and then declined slightly in the following year.

Production in China

Packaging materials production in China totaled 63M tons in 2018, waning by -8.3% against the previous year. The total output volume increased at an average annual rate of +2.9% over the period from 2008 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded over the period under review. The pace of growth appeared the most rapid in 2009 with an increase of 9.3% against the previous year. Over the period under review, packaging materials production attained its maximum volume at 69M tons in 2017, and then declined slightly in the following year.

In value terms, packaging materials production stood at $73.1B in 2018 estimated in export prices. In general, the total output indicated a buoyant increase from 2008 to 2018: its value increased at an average annual rate of +2.9% over the last decade. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, packaging materials production increased by +24.2% against 2016 indices. The pace of growth was the most pronounced in 2017 when production volume increased by 32% year-to-year. In that year, packaging materials production reached its peak level of $77.5B, and then declined slightly in the following year.

Exports from China

In 2018, the exports of packaging materials from China stood at 2.9M tons, going up by 4.7% against the previous year. Overall, packaging materials exports continue to indicate a buoyant expansion. The pace of growth was the most pronounced in 2014 with an increase of 33% year-to-year. Over the period under review, packaging materials exports attained their maximum at 2.9M tons in 2016; however, from 2017 to 2018, exports remained at a lower figure.

In value terms, packaging materials exports stood at $3.1B (IndexBox estimates) in 2018. Overall, packaging materials exports continue to indicate a buoyant increase. The most prominent rate of growth was recorded in 2014 with an increase of 36% y-o-y. Exports peaked in 2018 and are likely to continue its growth in the immediate term.

Exports by Country

Vietnam (183K tons), Iran (136K tons) and Bangladesh (127K tons) were the main destinations of packaging materials exports from China, together accounting for 16% of total exports.

From 2008 to 2018, the most notable rate of growth in terms of exports, amongst the main countries of destination, was attained by Bangladesh, while the other leaders experienced more modest paces of growth.

In value terms, Vietnam ($223M), the U.S. ($158M) and Iran ($118M) appeared to be the largest markets for packaging materials exported from China worldwide, together accounting for 16% of total exports.

Among the main countries of destination, Vietnam experienced the highest growth rate of exports, over the last decade, while the other leaders experienced more modest paces of growth.

Export Prices by Country

In 2018, the average packaging materials export price amounted to $1,073 per ton, surging by 4.2% against the previous year. Over the period from 2008 to 2018, it increased at an average annual rate of +1.9%. The most prominent rate of growth was recorded in 2011 when the average export price increased by 11% against the previous year. The export price peaked at $1,145 per ton in 2012; however, from 2013 to 2018, export prices remained at a lower figure.

There were significant differences in the average prices for the major foreign markets. In 2018, the country with the highest price was India ($1,471 per ton), while the average price for exports to Bangladesh ($788 per ton) was amongst the lowest.

From 2008 to 2018, the most notable rate of growth in terms of prices was recorded for supplies to India, while the prices for the other major destinations experienced more modest paces of growth.

Imports into China

Packaging materials imports into China totaled 2.3M tons in 2018, picking up by 3.4% against the previous year. Over the period under review, packaging materials imports continue to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2017 when imports increased by 13% against the previous year. Over the period under review, packaging materials imports reached their peak figure in 2018 and are expected to retain its growth in the immediate term.

In value terms, packaging materials imports amounted to $2.2B (IndexBox estimates) in 2018. The total import value increased at an average annual rate of +1.6% from 2008 to 2018; the trend pattern remained consistent, with somewhat noticeable fluctuations being recorded throughout the analyzed period. The pace of growth was the most pronounced in 2011 when imports increased by 15% y-o-y. In that year, packaging materials imports attained their peak of $2.3B. From 2012 to 2018, the growth of packaging materials imports remained at a lower figure.

Imports by Country

The U.S. (422K tons), Sweden (309K tons) and Taiwan, Chinese (168K tons) were the main suppliers of packaging materials imports to China, together comprising 39% of total imports. These countries were followed by Indonesia, Russia, Australia, Japan, Brazil, Finland, Canada, South Korea and New Zealand, which together accounted for a further 37%.

From 2008 to 2018, the most notable rate of growth in terms of imports, amongst the main suppliers, was attained by Canada, while the other leaders experienced more modest paces of growth.

In value terms, the largest packaging materials suppliers to China were the U.S. ($390M), Sweden ($293M) and Japan ($146M), together accounting for 37% of total imports. Taiwan, Chinese, Russia, Australia, Indonesia, Brazil, Finland, South Korea, Canada and New Zealand lagged somewhat behind, together comprising a further 33%.

In terms of the main suppliers, Canada experienced the highest rates of growth with regard to imports, over the last decade, while the other leaders experienced more modest paces of growth.

Import Prices by Country

The average packaging materials import price stood at $982 per ton in 2018, remaining relatively unchanged against the previous year. Over the last decade, it increased at an average annual rate of +1.1%. The growth pace was the most rapid in 2010 an increase of 15% year-to-year. The import price peaked at $1,120 per ton in 2014; however, from 2015 to 2018, import prices stood at a somewhat lower figure.

There were significant differences in the average prices amongst the major supplying countries. In 2018, the country with the highest price was Japan ($1,286 per ton), while the price for Indonesia ($630 per ton) was amongst the lowest.

From 2008 to 2018, the most notable rate of growth in terms of prices was attained by Australia, while the prices for the other major suppliers experienced more modest paces of growth.

Source: IndexBox Market Intelligence Platform