Enormous expansion in China’s chemical manufacturing is squeezing foreign producers out of its domestic market and intensifying competition overseas, according to a new report, as American chemical companies struggle with global oversupply and low prices.
China accounts for more than 45 percent of the world’s production capacity for basic chemicals and plastic resins, the Rhodium Group said in a report released on Nov. 2. Its chemical output has grown 18-fold over the past 25 years.
The buildup has created more production capacity than Chinese customers can absorb. As demand weakened, prices fell, inventories accumulated, and producers faced shrinking profits.
Foreign chemical manufacturers are being squeezed in two ways. They are losing sales in China as Chinese companies replace imported products, while facing increasing competition from Chinese exports in other countries….