An Industry-Oriented Outlook
----Mr.Xie Jin Jian
Guangdong West Tech Chemical Co., Ltd.
1. Demand, Supply and Price of Rosin in the Last Decade
According to the analysis of the Production output, Local Demand and Export Volume of Rosin in the past Decade in China. We can see the ratio of Export Volume to Production Volume decreases yearly. Local Demand growth increases. The price of Rosin in the first four years of the last decade was relatively stable. In 2005-2006, it fluctuated a little, and by 2009-2010 it fluctuated significantly. The price fluctuation was the largest in the last 12 months. The Price curves of Rosin and Oil seem to suggest a relationship between the price of Rosin and Oil. Apart from demand and supply factors, the Price fluctuation of Rosin seems to be similar to the CPI of Related Products. Gross Domestic Product, Domestic and Export Demand, Export Tax Rebates, Foreign Exchange Rates, amongst many factors, affect the Export Price of Rosin.
2. Demand, Supply and Price of Rosin in 2011 and in future Price Trend Analysis
1). Resin Farmers’ enthusiasm increased as prices rose, leading to an increase in the forests used for Resin Tapping . Output in 2011 is expected to increase (year-on-year).
2). Production Output has increased. But due to factors including Demand and Expectations of Inflation, the price of Rosin is expected to be relatively high in 2011.
3). In the next few years, according to the laws of demand and supply, the Rosin production in China should increase. However, there is a limit to its increase, due to the factors stated above. The price of Rosin in China is likely not going to be lower than the average price of Rosin in the last two years.
4). In the next few years, due to demand and supply factors, the fluctuation in the prices of Rosin between each year and from month to month is inevitable. In fact, the Frequency and Magnitude of the price fluctuations will increase.
3. Summary and Thoughts
In the next few years, the potential for growth in production output in China is limited and the Domestic demand for Rosin will increase. In light of these, China is shifting from a country that is a Produces and Exporter of Rosin to become a country that is both Producer and Consumer. The increase in Rosin prices stimulated a growth in Rosin Production and Output, not only in China, but also in Brazil, Indonesia, Vietnam, amongst many countries.
4. Outlook and Recommendation for the development of the Rosin Industry
1). Enhance Communication and Cooperation with Rosin and Resin Farmers, Manufacturers, Suppliers and End-Users, and seek to better aspects including Processing and Distribution. Increase the responsible development and utilization of pine forests. Raise the quality of enterprise management, and to reinforce business integrity and etiquette in the running of the company and during interactions and dealings with other companies.
2). Make full use of the role of the Association of Chambers of Commerce & Industry; Urge the government to increase policies that support or stimulate the industry. Policies including the imposition of tariffs on Chinese Rosin Derivative Exports, and tax rebates for higher-end Rosin Derivative Exports, are implemented to encourage the development of Rosin Derivatives and technological innovation.
Compared to international, large-scale, foreign enterprises of the same industry, China’s Rosin enterprises have a long way to go.