China Coatings Market Enters Stable Growth Period
In the first half of this year China’s GDP growth was 6.7 percent over the same period of last year. The real estate property market is driving the growth of China’s economy, with their sales in the first half of this year increased by 42.1 percent over the same period of last year. Passenger vehicle sales in the first half of this year have increased by 11.5 percent over the same period of last year.
China sold over 10 million vehicles in the first half of this year and in June alone China sold more than 20.6 percent of passenger vehicles than the same month of last year, the highest growth record in 2016.
With robust demand from infrastructure, real estate and automotive markets, coatings output has increased by 6.92 percent to reach 10 million tons by the end of July, 2016, compared with only 1.42 percent growth in the first half of 2015. Although several key pillar industries continue their fast growth, some industries are still struggling to turn around from their downturn period. For example, demand from manufacturing and exports are still soft. Furthermore, another challenge faced by coatings producers is that raw materials’ price have been bouncing back from their bottom following recent recovery of oil price.
According to the proposal of China’s coatings industry proposal for 13th Five Year Plan, which spans from 2016 to 2020, the total coatings output is estimated to be 22 million tons in 2020. The output of environmental friendly varieties will be 57 percent of total coatings output in 2020. And the plan hopes to have over 10 coatings companies whose annual sales will be over five billion RMB and have the coatings output of the top 50 companies to reach 50 percent of total output. Whereas double digit growth may not be seen in the future, the growth of the China coatings market is still not slow compared with those of developed countries. The same quick growth will not be as easy for coatings companies to achieve as they could before, and innovative marketing strategies and solid quality products are needed to win the competition in the future.