China rubber product exports up, tire investment down

Beijing – China’s chemical industry saw a 4.7-percent year-on-year drop in revenue growth rate and an 11.9-percent drop in profit growth rate during 2014, according to a report by the Ministry of Industry and Information Technology.

Profit margins within the chemical industry were also one percent lower than general Chinese industry, the report said. However, it added that the industry’s value-added output increased by 10.4 percent last year, reflecting a sector that is “well on the path transforming itself.”

A 12.8-percent increase in end-product inventory for the chemical industry and the industry’s cost per 100 yuan (€15) main business revenue growing by 0.58 yuan (€0.09) to 87.5 yuan (€13.1) was also reported.

The sector is predicted to see a 7-percent profit increase in 2015 to 470 billion yuan (€70.5 billion), while the report said that chemical companies’ operating costs kept rising during 2014.

In 2014 the chemicals sector accounted for 6.8 percent of the country’s total industrial value-added output, with 1.1 billion tires produced last year, up 6.3 percent from 2013.

Overall, chemical-industry profit grew 0.33 percent to 431 billion yuan (€64.7 billion) in 2014.

Revenue rose by 8.2 percent to 8.8 trillion yuan (€1.3 tillion) and is showing steady production growth and export momentum, the report stated.

It went on to say that there is a “slowdown” in revenue and investment growth.

In 2014, the value of export jumped 11 percent to $162.1 billion, while the value of import rose 0.6 percent to $186.5 billion.

Export of rubber products reached $52.3 billion, up 9.2 percent from 2013 and accounting for nearly a third of total chemical industry export. Over 80 percent of natural rubber, said the report, was dependent on foreign trade.

The ministry said 10,714 projects broke ground in 2014, up 2.5 percent on 2013.

Fixed asset investment within the industry rose 10.5 percent to 1.6 trillion yuan (€240 billion) in 2014, but that growth rate was slower than a 27.9 percent rate in 2012 and a 14.6 percent rate in 2013.

Investment in the tire sector fell by 1.4 percent, and rubber product facilities had a relatively low operating rate.

Progress was made in energy-saving during the first three quarters of 2014, with coal consumption per 10,000 yuan (€1,500) revenue reduced by 3.6 percent to 421kg.

China’s recent strategies, such as the New Silk Road Economic Belt linking China with Europe through Central and Western Asia, and the Silk Road linking China with Southeast Asian countries, Africa and Europe, are expected to bring new growth points.

The report also proposed a number of guidelines such as setting up a tire labeling system to help the development of green tires.