Since the article US Becomes China’s Major Injection Molding Machine Export Market was published, many Chinese plastic machinery manufacturers look to this super power and readers wonder if any changes have taken placed in US and whether the US demand for plastic machinery will continue to increase.

Figure 1 shows that injection molding machines take up nearly 80% of the plastics machinery exported to the United States from China. One reason is that in terms of other chemical machines, China still lags behind America in technology and fails to meet its technical requirements. In the case of trade of plastic machinery between China and the United States, China’s largest export to America is injection molding machine with January-May export sales of $20,887,000 and trade surplus of $17,491,000. On the other hand, China’s largest import from America is extruder with total value of $13,534,000 and trade deficit of $10,896,000. Injection molding machines will remain one of the major exports of China for a long time in the future. For technical indicators such as clamping force, plasticizing performance and production capacity, China’s injection molding machines are not advanced as Europe’s. But for price-performance ratio and everyday use, China’s injection molding machines still meet the needs of America’s industrial production.

Figure 1. Structure of China’s Plastic Machinery Exports to America January-May, 2013

In May, United States imported injection molding machines that total 7.027 million dollars from China and ranked first among other export markets of the same month. Major Asian export markets such as Thailand and Vietnam that bought a large number of injection molding machines last year sharply cut their year-on-year imports from China this year, which makes United States whose amount of imports in May is flat from last year’s a major injection molding machine export market of China.

In fact, US injection molding machine imports from China increased substantially since 2012, which was to some degree influenced by the proposal of the recovery of manufacturing. United States imported injection molding machines totally worth $52,805,000 from China in 2012, with a year-on-year growth of 124.5%. However, America’s volume of injection molding machine imports in the first five month of 2013 is actually a bit less than the previous year’s.

Figure 2. Statistics Chart of China’s Injection Molding Machine Exports to America January 2012-May 2013

US becomes China’s largest injection molding machine export market in May not only because of the slowdown in economy and investment of other Asian countries, but also thanks to the US economic recovery and the return of manufacturing under adverse circumstances such as global economic slump and shortage of consumption and investment. A recent industrial production report published by the United States indicates that manufacturing is recovering and plastic and rubber products manufacturing rises by 4.8% in June this year. Officials of SPI said that US plastics industry is very likely to go back to the level before economic recession. The current productivity and plant utilization rate of US plastics industry are 20% lower than that at the end of 2007 (before financial crisis).

Though America’s economy and plastics industry is recovering and the demand for plastic machinery is increasing, several things should be noticed:

First of all, some of the machine exports to America are originally for domestic sale. Many American manufacturers set their factories in China earlier but now they were back to their motherland as manufacturing is going up again. Their products projected to be sold in China now become exports, which has little influence on China’s plastic machine manufacturing. Data show that injection molding machine exported to the United States began to surge in 2012 which was the beginning of America’s support for the return of manufacturing.

Second, the consumption upturn of the US plastics market does not necessarily mean the growth of upstream production or more demands for equipment. Local American plastics manufacturers mainly serve four pillar industries of their countries: transport, medicine, packaging and aerospace industry, offering relatively high-end products. Daily consumer goods are mainly imported. In terms of the unit price, injection molding machine exported to the United States from China are high-end equipment. In the first five months of this year, the unit price of America’s injection molding machine imports from China is up to 84,000 dollars, but the unit price of China’s injection molding machine exports is at most 40,000 dollars. In other words, the increase of demands for plastic machinery in US is lower than that of the plastics industry.

Third, the United States has depended on quantitative easing to promote domestic employment and economy for years. But this super power is considering quitting the quantitative easing monetary policy, which will cause US to withdraw capital from the emerging countries and has certain impact on domestic economy. This is a problem that local American investors should take into account.

Fourth, American economy and global economy affect each other. Though American plastics industry is likely to pick up and go back to the level before financial crisis, but this will happen only on the premise that the Euro zone does not get significantly worse. It’s still too early to say that American economy fully recovers. Instead, the growth of US economy is exactly in cyclical fluctuation.

Therefore, the US plastic machinery market is predicted to hardly have a sharp growth in the near future and its growth rate is lower than the recovery rate of the whole plastics industry. Considering the market fluctuation, a slight fall will possibly appear in the second half of the year, but overall demand at least will continue till the end of this year.