Since July 21, 2005, China has adopted a floating exchange rate system based on market supply and demand for the renminbi. This reform measure immediately reverberated throughout the chemical industry. Especially in those enterprises that have export "competitive products", those enterprises that import and export businesses account for a large proportion of them are more responsive to those companies that want to make breakthroughs in the external economy. According to the feedback from a group of industries compiled by us today, although the products are different, the companies are different, and the industries are different, but from the overall situation, the effect of this reform is that the opportunities are greater than the challenges. This has given us a firm judgement: The reform of the exchange rate mechanism will help the development of the industry.
The reform of the exchange rate mechanism shows that China’s exchange rate policy is continuously improving toward more in line with China’s national conditions. Businesses have to face this change whether they want to or not. How the chemical industry seizes opportunities in the face of emerging new challenges and improves its ability to resist risks is a more in-depth article that needs to be continued.
Fertilizer: The bigger the appreciation, the better the market will be.
The fertilizer industry generally believes that the reform of the RMB exchange rate regime is an advantage for China's fertilizer market, and the larger the increase, the greater the positive effect on the fertilizer market.
From the analysis of chemical fertilizer trade, China has always been a net importer of chemical fertilizers. The main imported varieties are potassium chloride and diammonium phosphate. The export variety is mainly urea. In 2004, China accumulatively imported 12.435 million tons of chemical fertilizers, with an import volume of 2.30 billion U.S. dollars, and exports 7.353 million tons, with an export volume of 1.314 billion U.S. dollars. In order to ensure the resources of the domestic fertilizer market, this year the country has further controlled the export of chemical fertilizers by eliminating policies such as export tax rebates and levying export tariffs, which has further widened the country’s fertilizer trade deficit. From January to May of this year, China imported 6.449 million tons of chemical fertilizers, with an import value of 1.47 billion U.S. dollars, and exported 2.048 million tons of chemical fertilizers, with an export volume of 420 million U.S. dollars. It can be seen that the adjustment of the RMB exchange rate is conducive to encouraging the import of chemical fertilizers and suppressing exports so as to ensure the stability of the domestic fertilizer market.
As urea and diammonium phosphate, which are energy-based and resource-based products, do not advocate a large number of exports from the analysis of relevant national policies. In the future, China’s fertilizer exports will face double pressure from high export tariffs and RMB exchange rate adjustments, and exports will decline further. For China's increasingly short-lived phosphate rock resources, the new exchange rate will allow companies to purchase phosphate rock from the international market, while suppressing the export of phosphate rock. In the same way, in recent years, in order to develop high-concentration compound fertilizer production, the country has begun to import sulphur. This exchange rate adjustment is undoubtedly a good news for this.
Pesticides: shrinking surplus but beneficial to import intermediates
The response of the fertilizer industry to the reform of the RMB exchange rate mechanism is slightly different. In recent years, the reaction of the pesticide industry in China with 1/2 product exports has been mixed. At the same time, they also believe that in the long run, such reforms will be more conducive to promoting the restructuring of China's pesticide industry and improving the competitiveness of the international market.
It is understood that China’s pesticide import and export trade maintained a large trade surplus in 2004, with imports of 27,600 tons, import value of US$147 million, export volume of 391,600 tons, and export value of 11 900 million U.S. dollars. The export products are mainly herbicides and insecticides, while imports are mainly fungicides. From January to May of this year, China's cumulative import of pesticides reached 20,000 tons, and the import volume was 92 million US dollars; the export volume was as high as 189,000 tons and the export value was 630 million US dollars. Such a large trade surplus will naturally have a certain impact on the changes in the RMB exchange rate against the US dollar. However, the extent of the impact on the export of pesticides in China in the end, the industry is cautious.
On the positive side, due to the current domestic production of pesticides, some raw materials and intermediates still need to be imported. This exchange rate adjustment of the renminbi will undoubtedly be an advantage for the import of these products. The information obtained from the customs has increased the import of pesticides in some coastal cities with high efficiency, low toxicity, and low residue due to the increase in requirements for environmental protection and food safety. Therefore, people in the pesticide industry generally believe that the adjustment of the RMB exchange rate is also conducive to the development of China's green agriculture, and thus promote the adjustment of China's pesticide structure.
Rubber Machinery: Loss 7 Million to Profit 30 Million
The recent impact of RMB exchange rate fluctuations on the rubber machinery industry has been positive. This is the current basic view of the rubber machinery industry.
It is understood that China's rubber machinery market is mainly at home at this stage. The price of domestic rubber machinery is far behind that of imported rubber machinery. According to statistics, in 2004, the sales revenue of rubber machinery in China was 6 billion yuan, of which about 60 million US dollars were exported, and the proportion of exports was less than 9%. Calculated by the current adjustment rate, it is estimated that the total loss of the rubber machinery industry is 6 million to 7 million yuan, which can be said to have little effect on the direct loss of China's rubber machinery enterprises. From the perspective of direct corporate losses, with the exception of Yiyang Rubber & Plastics Group's export ratio of more than 30%, other rubber machinery companies' export ratios are all below 15%, and a considerable number of them do not export.
The proportion of imported components in rubber machinery in China is relatively large. Adjustment of RMB exchange rate will reduce the purchase cost of rubber machinery components. China's rubber machinery parts account for more than 15% of the total cost of equipment, including steel cord cutting machines, molding machines and other imported parts cost more than 50%, a conservative estimate of China's annual import of rubber machinery is more than 1.5 billion yuan, estimated exchange rate Adjust the cost of the entire rubber machinery industry by more than 30 million yuan. At the same time, due to the price reduction of imported kits, the enthusiasm of domestically-manufactured rubber machinery to import imported kits is higher, which is conducive to improving the market competitiveness of rubber machinery in China.
The reform of the exchange rate mechanism shows that China’s exchange rate policy is continuously improving toward more in line with China’s national conditions. Businesses have to face this change whether they want to or not. How the chemical industry seizes opportunities in the face of emerging new challenges and improves its ability to resist risks is a more in-depth article that needs to be continued.
Fertilizer: The bigger the appreciation, the better the market will be.
The fertilizer industry generally believes that the reform of the RMB exchange rate regime is an advantage for China's fertilizer market, and the larger the increase, the greater the positive effect on the fertilizer market.
From the analysis of chemical fertilizer trade, China has always been a net importer of chemical fertilizers. The main imported varieties are potassium chloride and diammonium phosphate. The export variety is mainly urea. In 2004, China accumulatively imported 12.435 million tons of chemical fertilizers, with an import volume of 2.30 billion U.S. dollars, and exports 7.353 million tons, with an export volume of 1.314 billion U.S. dollars. In order to ensure the resources of the domestic fertilizer market, this year the country has further controlled the export of chemical fertilizers by eliminating policies such as export tax rebates and levying export tariffs, which has further widened the country’s fertilizer trade deficit. From January to May of this year, China imported 6.449 million tons of chemical fertilizers, with an import value of 1.47 billion U.S. dollars, and exported 2.048 million tons of chemical fertilizers, with an export volume of 420 million U.S. dollars. It can be seen that the adjustment of the RMB exchange rate is conducive to encouraging the import of chemical fertilizers and suppressing exports so as to ensure the stability of the domestic fertilizer market.
As urea and diammonium phosphate, which are energy-based and resource-based products, do not advocate a large number of exports from the analysis of relevant national policies. In the future, China’s fertilizer exports will face double pressure from high export tariffs and RMB exchange rate adjustments, and exports will decline further. For China's increasingly short-lived phosphate rock resources, the new exchange rate will allow companies to purchase phosphate rock from the international market, while suppressing the export of phosphate rock. In the same way, in recent years, in order to develop high-concentration compound fertilizer production, the country has begun to import sulphur. This exchange rate adjustment is undoubtedly a good news for this.
Pesticides: shrinking surplus but beneficial to import intermediates
The response of the fertilizer industry to the reform of the RMB exchange rate mechanism is slightly different. In recent years, the reaction of the pesticide industry in China with 1/2 product exports has been mixed. At the same time, they also believe that in the long run, such reforms will be more conducive to promoting the restructuring of China's pesticide industry and improving the competitiveness of the international market.
It is understood that China’s pesticide import and export trade maintained a large trade surplus in 2004, with imports of 27,600 tons, import value of US$147 million, export volume of 391,600 tons, and export value of 11 900 million U.S. dollars. The export products are mainly herbicides and insecticides, while imports are mainly fungicides. From January to May of this year, China's cumulative import of pesticides reached 20,000 tons, and the import volume was 92 million US dollars; the export volume was as high as 189,000 tons and the export value was 630 million US dollars. Such a large trade surplus will naturally have a certain impact on the changes in the RMB exchange rate against the US dollar. However, the extent of the impact on the export of pesticides in China in the end, the industry is cautious.
On the positive side, due to the current domestic production of pesticides, some raw materials and intermediates still need to be imported. This exchange rate adjustment of the renminbi will undoubtedly be an advantage for the import of these products. The information obtained from the customs has increased the import of pesticides in some coastal cities with high efficiency, low toxicity, and low residue due to the increase in requirements for environmental protection and food safety. Therefore, people in the pesticide industry generally believe that the adjustment of the RMB exchange rate is also conducive to the development of China's green agriculture, and thus promote the adjustment of China's pesticide structure.
Rubber Machinery: Loss 7 Million to Profit 30 Million
The recent impact of RMB exchange rate fluctuations on the rubber machinery industry has been positive. This is the current basic view of the rubber machinery industry.
It is understood that China's rubber machinery market is mainly at home at this stage. The price of domestic rubber machinery is far behind that of imported rubber machinery. According to statistics, in 2004, the sales revenue of rubber machinery in China was 6 billion yuan, of which about 60 million US dollars were exported, and the proportion of exports was less than 9%. Calculated by the current adjustment rate, it is estimated that the total loss of the rubber machinery industry is 6 million to 7 million yuan, which can be said to have little effect on the direct loss of China's rubber machinery enterprises. From the perspective of direct corporate losses, with the exception of Yiyang Rubber & Plastics Group's export ratio of more than 30%, other rubber machinery companies' export ratios are all below 15%, and a considerable number of them do not export.
The proportion of imported components in rubber machinery in China is relatively large. Adjustment of RMB exchange rate will reduce the purchase cost of rubber machinery components. China's rubber machinery parts account for more than 15% of the total cost of equipment, including steel cord cutting machines, molding machines and other imported parts cost more than 50%, a conservative estimate of China's annual import of rubber machinery is more than 1.5 billion yuan, estimated exchange rate Adjust the cost of the entire rubber machinery industry by more than 30 million yuan. At the same time, due to the price reduction of imported kits, the enthusiasm of domestically-manufactured rubber machinery to import imported kits is higher, which is conducive to improving the market competitiveness of rubber machinery in China.
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