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Xinjiang Tianye, which has major profits from chemical products and plastic products, has voluntarily changed its business strategy due to too volatile ethylene prices. The main raw material for agricultural film and greenhouse film produced by Xinjiang Tianye is polyethylene, and polyethylene is made of ethylene. Polyethylene, polyvinyl chloride, industrial salt, and pyrite and other raw materials account for about 60% of its manufacturing cost. A person in charge of the company’s secretarial office told reporters yesterday that during the financial crisis, ethylene prices fluctuate greatly. To reduce risk, the company adopted the pattern of processing after the financial crisis, earning only processing fees.
This model has continued until now, Xinjiang Tianye gladly adopted this model earlier. According to Shenyin Wanguo, during the financial crisis, Asian ethylene prices in 2008 averaged US$1,152 per ton, and in 2009 it fell to US$857 per ton. In the first quarter of 2010, the average price rose to US$1,264 per ton.
Another listed company with plastic film as its main business, Guofeng Plastics, did not adopt the processing mode for incoming materials. In 2008, its profit was 4.6223 million yuan, but in 2009 there was a loss of 1333.6661 million yuan. A responsible person of Guofeng Plastics Industry and Trade Office told the newspaper yesterday that the company's current raw materials are mainly polypropylene, which mainly produces food packaging and other plastics. Before that, it also used polyethylene to produce agricultural films. Since then, the product structure has been adjusted. Purchasing polyethylene raw materials.
Li Dunyu, an analyst at United Business Network, told reporters yesterday that ethylene prices have risen from the low of more than 800 US dollars/ton last year to more than 1,300 US dollars/ton.
Last week, the ex-factory prices of domestic spot companies all have different degrees of price adjustment, and the price increase range is between 100 and 300 yuan per ton.
As a basic chemical raw material, ethylene is widely used in home appliances, automobiles, IT and other industries. Due to the large increase in demand, ethylene production capacity is in short supply. In recent years, Sinopec and CNPC have launched several large-scale ethylene projects in China.
In 2010, the prices of polyethylene and polypropylene rose by about 15%. China Petroleum and Chemical Industry Federation, deputy director of information and marketing Zhu Yi P previously expected that in 2011 the domestic apparent consumption of ethylene will also increase by about 13%. Li Dunyu believes that ethylene prices will continue to rise this year.
Ethylene, one of the basic chemical materials, has a wide range of applications. Its price fluctuations affect the downstream as much as Steel and copper and other metal raw materials.