1. The raw material market fluctuates greatly. Affected by many factors such as the release of new ethylene production capacity at home and abroad, the recent decline in international oil prices, and weak global demand, polyethylene prices have been declining slowly recently. Among them, the market price of LLDPE, the main raw material of mulch film, is only about 11,000 yuan/ton, down 10% year-on-year, with no obvious signs of rebound, which has affected dealers' confidence in the future of agricultural film and shaken the confidence of agricultural film manufacturers.

2. The decline in grain and cotton prices has dampened farmers’ enthusiasm for using agricultural films. Since 2012, cotton prices have been hovering at low levels. The spot price of corn has steadily declined after the Spring Festival, and futures prices have fallen sharply recently. These have seriously dampened farmers' enthusiasm for planting corn and cotton, reduced the demand for mulch films, and resulted in agricultural film shortages. Market shrinks.

3. Overcapacity is very serious. At present, the effective production capacity of agricultural film in the country exceeds 4.5 million tons, the total demand is only 2.2 million tons per year, and the overcapacity is more than doubled. In this case, when the market is good, companies will invariably increase equipment operating rates, increase market supply, and suppress price declines; when demand shrinks, companies have to passively reduce operating rates to minimize losses. This is also the reason why over the years, agricultural film companies have made little profit when the market is good and have increased losses when the market is bad.