HANDLER

Market trends

news Market trends

Global Industrial Automation Equipment Market to Grow by 3.8% in 2018

- Global Industrial Automation Equipment Market to Grow by 3.8% in 2018Major Indices ComparisonThe global industrial automation equipment market is expected to grow by 3.8%in 2018 to US$209.8 billion, according to a report by IHS Markit.The global industrial automation equipment (IAE) market was estimated at US$202.2 billion in 2017, and it is projected to grow by 3.8% in 2018 to US$209.8 billion and by 4% in 2019 to US$218.2 billion, according to a report by IHS Markit. In general, the machines are becoming more automated, and this growth is specifically driven by rising industrial production, a strong global economy, growing machinery production and capital expenditure.In 2017, the automation equipment category led with 37.1% share of the industrial automation equipment market, followed by power transmission equipment with 32.9%, and motors and motor controls with 30%.Total industrial capital expenditure is expected to continue to grow by 3%, year over year, in 2017, 6% in 2018 and 4% in 2019.IHS Markit expected that some companies will close their doors to new proof-of-concept smart manufacturing projects in 2018, until existing and ongoing projects are completed or show a return on investment.Rising machinery production points to growing demand for automation equipment going into the new machines. The global industrial automation equipment market is expected to maintain solid growth through 2019, for a few reasons, as the report stated.In 2017, many smart manufacturing initiatives began to materialize, especially in countries like the United States, Germany and China. However, more multi-national end-users are expected to only accept trials of new solutions that are fully funded by the vendor, until returns are realized.Total industrial capital expenditure is expected to continue to grow through 2019. Specifically, spending on industrial automation equipment is forecast to increase in 2017 and beyond.Rising industrial production typically follows a stronger world economy. After 3.2% growth in 2017, the IHS Markit forecast in April 2018 showed world real gross domestic product (GDP) growth is projected to increase 3.4% in 2018 and 2019 respectively.Source: CPRJ International

Aeyoung Park 2018-07-26

The Top 10 Most Valuable Chemical Brands of 2018

- BASF ranked as the No. 1 chemical brand followed by Dow and Sabic- LG Chemical newly ranked in top 10 listBASF remains most valuableBASF has maintained its status as the world’s most valuable chemicals brand, following 13% brand value growth from last year to US$7.4 billion, according to a new report by Brand Finance, the world’s leading independent brand valuation and strategy consultancy. The brand value of BASF was boosted as a result of increased revenue projections after a strong 2017, which included the announcement and subsequent purchase of parts of Bayer’s businesses, in connection with Bayer’s acquisition of Monsanto. Dow boosted by merger with DuPont In second rank, Dow’s brand value surged 38% to US$6.5 billion, offset by the result of DuPont (down 10% to US$2.7 billion). Michigan-based Dow and Delaware’s DuPont have now completed their corporate merger while continuing to restructure their businesses to operate under separate Dow, DuPont, and new Corteva brands. Although, at the moment, the combined value of Dow and DuPont at the moment, the combined value of Dow and DuPont at US$9.2 billion is greater than that of BASF, it remains to be seen how the merger and ensuing reallocation of assets impacts their respective brand values.SABIC powers aheadSaudi petrochemicals giant SABIC has grown faster over the past year than any other brand in the Brand Finance Chemicals 10 league table, jumping from 8th to 3rd rank.Contributing to SABIC’s impressive 78% increase in brand value to US$3.7 billion is the renewed effort by the brand to capitalise on the US shale boom by growing its business across America. Having recently announced plans for a new head office in Houston, Texas, SABIC is a major supplier of polyethylene and other commodity resins across the Western Hemisphere. Boosted by the rise in oil prices, SABIC is also looking into opportunities to access the African market and considering acquisitions in Europe and China.Brands mid-ranking lose valueBrands in the middle of the Brand Finance Chemicals 10 ranking did not share in the strong gains of those at the top. Air Liquide (down 9% to US$2.3 billion), Asahi Kasei (down 5% to US$2.3 billion) and Mitsubishi Chemicals (down 9% to US$2.3 billion) suffered significant losses to their brand value. Asahi and Mitsubishi were both affected by the relative weakness of the Japanese yen.In addition to overall brand value, Brand Finance also evaluates brand strength. Mitsubishi’s brand has the weakest strength in the top 10 as a result of the company’s online and social media performance lagging behind its peers who have expanded their digital marketing and promotion, particularly on LinkedIn, a crucial portal for talent recruitment. The staff are one of the main stakeholders influenced by a brand’s strength, with stronger brands attracting and retaining quality employees. To catch up, Mitsubishi is hiring specialist social media marketeers and launched a multi-million-dollar cross-platform campaign. The brand also suffered reputational damage in October last year when, in the course of an investigation into data falsification by supplier Kobe Steel, it reported that its materials division had also falsified data.Source: Brand Finance

Aeyoung Park 2018-07-26

Italian Plastics Processing Machinery Up 26% in Imports in Q1

- Italian plastics processing machinery up 26% in imports in Q1The Statistical Studies Centre of Amaplast (Italian trade association for plastics and rubber processing machinery) has analysed foreign trade data published by ISTAT for the first quarter of 2018. A comparison with the same period in 2017 revealed growth of 26% in imports and a contraction of approximately 1% in exports.This provides indications of two important factors. Significant and constant growth in purchases abroad, suggesting sustained recovery in the domestic market, as already seen in the impressive positive results at year-end 2017.As underscored by Alessandro Grassi, Amaplast’s President at the Members Assembly on 14 June in Linz, Austria, “It is a fact that the propensity to invest among Italian converters is back on a positive growth trend and we can only be happy about this.”The slowdown in exports should not come as a surprise and may be considered to fall within a normal range of variation. After the first two months of continued positive growth, the slowdown in March was almost to be expected, heralded also by decreases in orders as reported by members in the last weeks of the period.It is clearly premature to be talking about a decline, even though we must acknowledge that the sector has witnessed continuous positive growth for at least seven or eight years (with the exception of a brief dip in 2013) and thus, given the inherent cyclical nature of the economy, a negative phase would be entirely within the norm in the medium or even short term.After an excellent 2017, with double-digit growth in all indicators, it is still not unreasonable to expect the current year to close out with positive performance both in production and in foreign trade, albeit at a more modest growth rate as compared with recent years.The mid-June Amaplast member survey comparing the current half year with the same period in 2017 revealed that more than half (51%) forecast stable turnover and a significant portion (38%) foresee improvement. As regards orders, 42% of members forecast substantial stability while 41% expect to see increases.CPRJ International

Aeyoung Park 2018-07-12

US' Tariffs Begin for China-made Machinery

Plastics processing machinery falls under President Donald Trump's additional 25 percent tariffs spanning $34 billion worth of goods from China that began July 6, but officials of injection press importers say not to expect an immediate price jump, since they have machines in stock at U.S. facilities.However, executives are concerned about what a prolonged trade war could do to the larger economy. A trade-conflict-driven downturn in automotive, an important market segment for plastics machinery, would damage the equipment sector, they said.Trump has proposed tariffs of up to 25 percent on foreign cars and trucks. General Motors Co. and other automakers have warned that tariffs could significantly raise prices of cars sold in the United States, reduce sales and cut jobs.And while those tariffs remain up in the air, China has retaliated by launching its own tariffs covering agricultural products, autos and other products on July 6."It's all connected, at least in my mind. I'm a little more concerned about what happens on the macroeconomic scale," said John Beary, president of Yizumi-HPM Corp.Executives of Absolute Haitian Corp., Yizumi-HPM and CH-America, which sells Chen Hsong presses, said they have injection molding machines in stock at their U.S. facilities. Because those presses were in the United States before the tariff, they are available at the regular price, the officials said.CH-America President Ken Heyse said the Torrington, Conn., company bought a large number of machines in anticipation of the tariffs. He said there will be a transition period."It's not like everybody is going to wake up Monday morning to higher prices," Heyse said.Looking at plastics equipment, the China tariffs cover more than injection molding machines. Chinese-made extruders, blow molding machines and thermoformers are on the list, as well as machine beds, platens and some other parts and hydraulic assemblies.Also on the list: molds for injection and compression molding.Injection molding machinery officials contacted for this story said customers have only recently started to ask about impacts of the tariffs. But the tariffs — which cover a broad range of industrial goods, not just plastics machinery — probably haven't sunk in yet with many processors, they said."I would say the last two to three weeks, the majority of our customers have at least mentioned it as we're quoting new machine sales opportunities," Beary said.Stocking upFacing potential tariffs, Beary said that Yizumi-HPM, based in Iberia, Ohio, began talking in February and March with Chinese parent Guangdong Yizumi Precision Machinery Co. Ltd. to increase the injection press build schedule for 2018."We don't anticipate having to raise our prices," Beary said. "We were fortunate enough to plan with our parent company earlier this year, so we have quite a few machines that are in our inventory here, stateside. Going forward, we are still working with Yizumi to develop an appropriate strategy. We want to do what we can do to minimize any negative impact for our customers."Yizumi also has a factory in India, giving it some flexibility to move production for presses bound for the United States, depending on how long the tariffs last.Glenn Frohring, president of Absolute Haitian, said customer phone calls began to pick up in late June, as the July 6 tariff date loomed. The company based in Worcester, Mass., sells injection molding presses made in China by Haitian Plastics Machinery Ltd., one of the world's largest plastics machinery manufacturers."Basically, there's a cost, and the cost is going up. Our strategy is to work together with Haitian and our customers to limit the tariff exposure to them," Frohring said. "Let's work with this together so it's not just one party absorbing the tariff."Absolute Haitian tries to keep its U.S. machinery levels high and worked to bring presses over before the tariff kicked in, he said. The company is selling machines out of that stock.Frohring, like Beary, is concerned about the impact of a trade battle on the broader economy, especially automotive.Officials of Absolute Haitian will travel to China later this month to discuss the tariff issue. Haitian has manufacturing operations in China, Brazil, Germany, Vietnam and India, so company leaders could consider building presses for the U.S. market in locations outside of China, he said.Absolute Haitian officials announced at NPE2018 the company is building a 116,000-square-foot facility in South Carolina to house stock machines, parts, sales, service and training.Tim Erdmann, principal of Plante Moran's manufacturing consulting group, said his firm is not yet fielding many calls from plastics processors asking about the China tariffs."I've gotten much more reaction on the steel and aluminum tariffs," which began June 1, he said. "Folks are actually starting to see the impact that the steel and aluminum tariffs have created."Erdmann thinks the China tariffs are still too new for processors to digest. The tariffs on Chinese goods, like the levies on steel and aluminum from several countries, are part of the Trump administration's negotiating tactics, he said."They are shots across the bow. How many of these will remain in force, and how long?" Erdmann said.Short or long term?Frohring, of Absolute Haitian, said if the trade war is short, it could mitigate the need to charge more."I don't think we're going to raise prices, because if the tariff goes away, the price stays the same. And it's just working together to manage the tariffs," he said.Heyse said that the uncertainty over the duration of the China tariffs makes it hard to plan for the future. Hong Kong-based Chen Hsong formally kicked off its effort to sell in the United States and Canada, through CH-America, at NPE2018. Now the tariffs come just as the business is starting. The firm does have some machines in inventory, he said."We don't know how long it's going to last. We don't know how much of the tariff to pass through to our customers, so we are really trying to take a step-by-step approach to this," Heyse said. "We are looking at raising prices, hopefully temporarily."CH-America gave customers and sales representatives advance notice about the pending tariffs. "We gave [customers] a fixed date of a week past the tariffs to purchase the machines at the existing prices, and after that prices are going to be increased."Tariffs on equipment from China will hit the broader plastics machinery sector, as most primary equipment manufacturers have become highly international, securing components overseas for U.S. press assembly operations, and even exporting completed machines.Austria-based Engel Holding GmbH builds its general purpose injection press, Wintec, in Changzou, China, and this year started selling them in the United States."We'll continue to proceed forward with Wintec," said Mark Sankovitch, president of Engel Machinery Inc., the company's U.S. operation in York, Pa.Sankovitch said Engel could shift some Wintec production to another country. The e-win electric Wintec press is not made in China now, he said.As a global player, Engel is trying to be proactive and inform customers about the situation, Sankovitch said. But he said all major machinery companies face challenges, especially for machinery ordered months ago, and under construction, which now fall under the tariff."You may be so far along in the schedule of that process that there's no turning back, in the sense that I can go and maybe have this manufactured someplace else. It doesn't work that way. So now you're stuck," he said.In a case like that, the machinery supplier and customer have to strike a compromise, since neither side can absorb the full 25 percent increase, he said.Meanwhile, Engel announced at NPE2018 that it will resume U.S. assembly of large-tonnage injection presses in York this year.Sankovitch said the company is dealing with Trump's executive order for China tariffs on a day-to-day basis. "As quickly as it comes, it can go away. So it's the stroke of a pen by Mr. Trump," he said.Milacron Holdings Corp. is based in Ohio but has far-flung manufacturing operations around the world. Showing how global manufacturing and supply chain issues make the tariff issue more complicated, in May, Milacron CEO Tom Goeke filed comments about the tariff with the office of the U.S government, saying the company favored tariffs on finished Chinese plastics machinery that it competes against, but arguing that tariffs should not be enacted on Chinese-made components that Milacron uses.Contacted for this story, Milacron Chief Financial Officer Bruce Chalmers said the publicly traded company would not comment until after it releases second-quarter financial results on July 26.Many customers are asking about tariffs, said Peter Gardner, vice president of sales and general manager of Daiichi Jitsugyo America, the U.S. distributor of Niigata injection presses from Japan and molding machines from South Korean builder LS Mtron Ltd. Country-of-origin issues can be confusing, since some Japanese and European machines are made in China today, he said.Gardner said he will take advantage of the low duty of Japanese-made machines, 3.3 percent, and the zero duty on Korean-made presses."While some will say it will put Chinese-made machinery at a disadvantage, others may say it will simply level the playing field," Gardner said.Manufacturing is being hit with a dizzying array of tariffs and growing trade wars, with the China tariff battle, the tariffs on steel and aluminum and potential auto tariffs, plus renegotiation of the North American Free Trade Agreement.The wide range of opinions about the tariffs on molds from China illustrates how, when it comes to protectionism, every company has its own angle of self-interest."My processor clients of course are very concerned, because several of them have tools in China already," consultant Laurie Harbour said. "Mold bases and all are included [in the tariff]. So they are absolutely going to get impacted by it."Harbour said smaller U.S. mold makers are happy about the tariff move. But larger ones, with operations or partnerships in China, will get hit."This 25 percent tariff could theoretically eliminate the cost advantage of going to China," she said.And Canada, already a formidable competitor to U.S. mold makers, could be a wild card, if China exports tools to Canada to get around the tariffs. Harbour thinks customs officials will require more paperwork certifying the country of origin, significantly adding transactional costs.

Aeyoung Park 2018-07-12

Market for AM in automotive production to reach US$5.3 billion in 2023

Market for AM in automotive production to reach US$5.3 billion in 2023According to a new report by industry analyst firm SmarTech Publishing, the overall market for additive manufacturing (AM) in automotive is expected to reach US$5.3 billion in revenues in 2023 and then grow to an impressive US $12.4 billion by 2028.The report pointed out that by 2028, the adoption of AM by the automotive segment for production purposes is going to mark an inflection point for the industry. While the market remains focused on prototyping and tooling, parts production will become the primary revenue opportunity by the end of the forecast period, surpassing prototyping, tooling, hardware and materials. Parts production including metal and polymer parts, as well as both parts produced internally by automotive OEM’s and in outsourcing, isexpected to be the primary revenue opportunity driving the entire segment, totaling nearly US$4.3 billion by the end of 2028.On the one hand, major new hardware from leading vendor is now focusing on automotive part production: multi-jet fusion (HP), digital light synthesis (Carbon) as well as metal binder jetting projects from Desktop Metal, GE, HP and Stratasys.On the other hand, major automotive OEMs have formed partnership with AM hardware OEM focusing on part production given the value they see from integrating additive manufacturing into their processes.Automotive industry stakeholders worldwide are racing toward full industrialization and integration of the AM process within their end-to-end production workflow, beginning with software and materials, passing through the actual AM hardware, and ending with services and a growing number of possible applications.Source: CPRJ International

Aeyoung Park 2018-07-09

Germany to launch recycling law for packaging in 2019

Businesses selling to consumers in the German market can face a fine of up to 50,000 euros ($58,290) and a prohibition in sales if they fail to comply with the country’s updated packaging laws.The act, which was approved in May 2017, will come into force at the beginning of 2019. It aims to improve the existing law on packaging by focusing on recycling and prevention of packaging waste.As part of the act, recycling targets for the different packaging materials will be increased, reaching 63 percent for plastic by 2022, from the current 36 percent. A 90 percent recycling target has been set for metal, glass, and paper and board by 2022. The act will also encourage reusable packaging, with the target of 70 percent reusable beverage packaging.Furthermore, the act will offer incentives for packaging producers to incorporate recyclability considerations into packaging design.Additionally, all businesses will have to register with the central packaging registry at www.verpackungsregister.com to maintain market access.According to consultants Lorax Compliance, companies that produce volumes of packaging higher than 80,000 kilograms of glass, 50,000 kilograms of paper and cardboard and 30,000 kilograms of aluminium, plastic and compounds which are sold in Germany should submit a declaration of compliance (DOC). Failing to do so could incur a 50,000 euro fine.“Germany as a country has set itself some ambitious future recycling targets to meet, which will affect producers considerably going forward,” explained Michelle Carvell, chief operating officer for Lorax.The legislation applies to all manufacturers, importers, distributors and online retailers placing goods on the German market.All companies which sell goods in Germany must prepare to participate in a dual system to arrange for packaging recovery after use to continue trading in the country.

Aeyoung Park 2018-07-05

Processors and producers struggle with nylon 6/6 resin shortage

- Nylon 6/6 resin has become hard to get in markets around the world▲ Ascent Performance Materials McDivittTight supplies of adiponitrile (ADN) feedstock have caused supplies of nylon 6/6 resin to become tight as well, according to market sources contacted recently by Plastics News.Resin market tightness in turn has led to higher prices for nylon 6/6, with some market sources citing increases of more than 50 percent — and as much as 80 cents per pound — in the last 18 months. Additional price increases were announced for July 1.An executive with an Ohio-based injection molder summed up the nylon 6/6 situation."The market is tight all over and pricing is nuts," he said.Rick Tizzard, sourcing director at distribution firm M. Holland Co. in Northbrook, Ill., added that the nylon 6/6 market "is balanced on the edge of a knife right now.""Automotive companies will feel the [nylon 6/6] pinch the most, because there are so many applications there," he said, "but these materials are specified for those applications, and it takes time to get a replacement material specified."In some cases, Tizzard added, nylon 6/6 users are trying to use nylon 6 instead. "Even if 5-10 percent [of nylon 6/6 users] did that, it would alleviate some pressure," he said."At this time, we are able to secure enough supply to cover our normal customer demand," added Shawn Williams, plastics senior vice president with distributor Nexeo Solutions in The Woodlands, Texas. "But we foresee the market continuing to get tighter before it gets better."Distributors are even having difficulty sourcing wide-spec or reprocessed grades of nylon 6/6, according to Michael Bernich, producer sourcing vice president with distribution firm Jamplast Inc. in Ellisville, Mo. In some cases, Jamplast has offered customers biobased plastics as a replacement, he added.Executives at nylon 6/6 makers Ascend Performance Materials and DowDuPont Co. said their firms are doing what they can in a tight market.Phil McDivitt, CEO at Houston-based Ascend, said the tightness is being caused by several factors, including underlying growth in major end uses of nylon 6/6 such as automotive, industrial fiber and cable ties. Demand in these areas is growing more than 3 percent annually, with growth in a more specified product like airbags checking in at 6-8 percent.McDivitt added in an interview with Plastics News that for several years, financial results in the ADN market weren't at a sufficient level to support investment. "If you look at the [ADN] industry, there was a lack of adequate returns for an extended period of time," he said. "As a result, there was a delay in making investments."Several market sources also cited ADN production problems at the Butachemie joint venture between Invista and BASF SE in Ottmarsheim, Germany, as having an impact on the nylon 6/6 market. That site ranks as the world's largest ADN production unit.In late 2017 and early 2018, Ascend added 110 million pounds of ADN capacity at its plant in Decatur, Ala. The firm plans to add almost 90 million pounds by the end of the year and almost 400 million more pounds by 2022."With a large site and our operational knowledge, we can add capacity in a modular fashion," McDivitt said. "Our strategy continues to be to expand in Decatur."▲ DowDuPont MayoExpect tight conditions through 2019But even with these expansions, McDivitt expects the nylon 6/6 market to be tight through the end of 2019. He added that although the tightness has led to higher selling prices for nylon 6/6, materials that have been suggested as replacements still are more expensive."I think what this has shown us is that nylon 6/6 has been underpriced relative to its value," McDivitt said.DowDuPont's Richard Mayo agreed that the market for nylon 6/6 and its derivatives in fibers and engineering plastics is "globally tight.""We've seen strong demand for the last several years because nylon 6/6 is a great value proposition in engineering plastics," he said in an interview. "In automotive in particular, nylon 6/6 is used for lightweighting."But Mayo, who serves as global nylon and polyester business director for DowDuPont, which is based in Wilmington, Del., and Midland, Mich., added that investments in ADN and other upstream feedstocks "haven't followed the same growth.""At the aggregate level, there's more [ADN] demand than supply," he said. "In a way, [makers of 6/6] have been victims of our own success."Mayo added that ADN sites on the U.S. Gulf Coast were impacted by hurricanes last fall. Those outages "created a big hole that the industry has struggled to recover from, and that's been exacerbated by issues with some big assets in Europe."According to Mayo, ADN is the primary issue, but nylon 6/6 also has been challenged by problems with other feedstocks, such as adipic acid and HMD.He added that supply problems for ADN and nylon 6/6 could last "at least until the end of next year." DowDuPont, which isn't back-integrated into ADN, "continues to meet the demand of long-time customers," but also is receiving "lots of enquiries from people looking for product."Mayo added: "There's no need for long-term customers to look at alternate materials."'Shortage?' Or an 'unsupported' claim?The tight nylon 6/6 market also has led to a bit of a war of words between Ascend and distribution firm PolySource LLC of Independence, Mo.In May, PolySource applications development director Cliff Watkins, a 30-plus-year industry veteran, circulated a document titled "How to survive the structural [nylon] shortage." In the three-page document, Watkins details historic reasons for the shortage and recommends several possible replacement materials.He cited DuPont — now DowDuPont — exiting ADN production as a reason for current tightness of that material."Chemical plants only make money when they are run at full capacity, and without a strategic underpinning (like which came from DuPont), no one builds plants far ahead of forecasted need," Watkins wrote.He added that capacity additions announced by ADN makers "won't be sufficient to meet market demand until 2021 at the earliest." Potential nylon 6/6 replacements offered by Watkins and PolySource include nylon 6, aliphatic polyketone, PPA high-heat nylon and polybutylene terephthalate.Ascend responded to Watkins' document with a reply from senior business director Dharm Vahalia, which challenged and criticized several of Watkins' points. "While we recognize the concern surrounding nylon 6/6 supply, the hysteria exhibited in [the PolySource article] is unfounded," he wrote.The "full production" claim "is … refuted by the ability to increase capacity through debottlenecking, meaning that the process being debottlenecked was previously running below capacity," according to Vahalia, who has almost 20 years of industry experience.He added that the claim of ongoing ADN undersupply "is unsupported by third-party analysis and that it's "misleading" to suggest that other materials could easily replace nylon 6/6."Making claims against a competitive product without legitimate supporting data is an area where the industry needs to improve and be more transparent," Vahalia said.

Aeyoung Park 2018-07-05

China’s Machinery Production Market Set to Grow 7.9% in 2018

China’s Machinery Production Market Set to Grow 7.9% in 2018China's machinery production is growing at a slightly slower rate in 2018 than that it did in 2017, but the industry is exhibiting strong growth of 7.9%, according to IHS Markit. Meanwhile, the overall production of material handling equipment will grow by 12.6% in 2018.IHS Markit expects the machinery production in China will continue to rise at a compound annual growth rate (CAGR) of 7.6% from 2018 to 2022.Favorable national policiesIn 2018, the Chinese government issued a series of favorable policies to promote the development of its manufacturing industry -- for example, the country’s strategic “Made in China 2025” program, which encourages enterprises to use high-end machine tools.As of April 2018, China's Ministry of Industry and Information Technology (MIIT) had founded five national innovation centers for material manufacturing, to focus on batteries for electric vehicles, optoelectronic information technology, traditional and flexible display panels and robots.The ministry also cultivated about 60 manufacturing innovation centers, at the provincial level. At the same time, the government’s implementation of comprehensive tax cuts for productive enterprises also provided policy support for machinery manufacturers.China will continue its "The Belt and Road Initiative" policy, strengthening cooperation with the member countries in the initiative and others in Latin America. To a certain extent, this initiative expanded the market for machinery used in automobile manufacturing, construction, electronics, metallurgy and textiles, says IHS Markit.Continuous optimization of industrial environmentIn China, new industries are growing fast. In the first quarter of 2018, the added value investment of high-tech manufacturing (i.e., information technology, biological engineering and new materials) increased by 11.9%, while fixed asset investment grew 7.9%.As said, equipment manufacturing and consumer goods manufacturing grew faster than other categories. Industrial robots, new energy vehicles, integrated circuits and other new products are growing rapidly. Faster development of the downstream industry has led to demand growth in related machinery products.The emergence of artificial intelligence, big data and other Internet of Things (IoT) technologies is injecting new vitality into China's machinery market. Its leading machinery manufacturers introduced the IoT concept into machinery, actively transforming themselves from traditional machinery producers to manufacturing services companies.Machinery production forecastIn 2018 China's machinery production development will be buoyed by the country’s national policy guidance and support, a large influx of investment funds and the initial effect of industrial structure adjustment. However, other more unfavorable development factors for development in 2018 cannot be ignored, comments IHS Markit.With trade disputes, like the China-US friction in 2018, on the rise, there is still a lot of uncertainty in the international environment. Domestic infrastructure investment in China is affected by national policies and macro-control, which strengthens its supervision of Public-Private Partnership (PPP) projects this year, but might also negatively affect infrastructure investment growth, causing some pressure on China’s domestic economy.Still, China’s machinery production will grow steadily under this pressure in 2018. With the continuous optimization of its industrial environment in the next four to five years, China’s machinery production market will steadily rise, even as it transforms, IHS Markit concludes.Source: CPRJ Intl

Aeyoung Park 2018-06-29