Introduction: At present, the price of masks has dropped by 90% from its peak. The current purchase price of meltblown cloth is 36,000 yuan/ton, which is already 1/20 of the highest price. It is worth noting that from the perspective of the mask industry chain, the most profitable ones are actually the manufacturers of mask machines.
In just a few months, manufacturers rushing into the mask industry found that the demand for masks began to ebb.
Zong Jun (pseudonym), general manager of a mask manufacturer in Hubei, said in an interview: “From our experience, the price of masks is the highest in March, with the peak price of 1.6 yuan each, and the profit can be Reaching 0.3-0.5 yuan. Subsequently, a large number of production equipment was put into production and raw materials were saturated. Our current wholesale price of a mask is 0.12-0.18 yuan.”
This price has fallen by 90% from its peak, but Zong Jun still insists on production, because with the decline in raw material prices, making masks still has a small profit.
The company where foreign trade business manager Zhang Xin (pseudonym) works also entered the market when masks were the hottest. Because they spent a lot of money on export certification, even though their company’s export price of masks has increased from a maximum of 0.65 US dollars. One fell to $0.17-0.20, but order books remained steady.
At present, domestic epidemic prevention materials are sufficient, the mask industry is gradually turning cold, and export sales of masks are still relatively prosperous. However, production conversion has become an “important lesson” that many companies have mentioned on their agenda.
From peak period to plateau period
“The price of masks has returned to stability. The wholesale price in March and April dropped from 1 to 2 yuan apiece to only a few cents.” Wenjuan (pseudonym), a salesperson at a mask manufacturer in Jiangmen City, Guangdong Province, told reporters that their company After entering the mask industry in mid-March and enjoying peak profits, mask prices have now dropped significantly.
Like Wenjuan’s company, there were many companies that entered the industry when mask prices were at their peak.
Li Zhongxun, deputy director of Chengdu Ruizhi Jianhe Medical Equipment Co., Ltd., told reporters that their company ordered a machine to produce masks at the end of February, found a factory, and started official production on April 1. It was difficult to debug the mask equipment in the early stage, so the output was not high and the workers were not familiar with it. Later, the production capacity gradually increased.
This company has always focused on overseas markets, with the highest shipping price at 1.45 yuan per piece, and the profit of a single mask at that time was 0.6-0.7 yuan. Although the early shipment price of masks is high, the prices of machines, employees and raw materials are relatively high, so the profit margin is about 50%.
Zong Jun is a mask manufacturer in Hubei. The factory was not very large before and had not a lot of inventory. However, after the outbreak, the local government selected several mask companies to work overtime to produce masks, and the output of their factories has greatly increased.
Now, Zong Jun is beginning to face the situation that domestic masks are relatively sufficient. “Our company has not obtained export certification and cannot export overseas.” He said that the wholesale price of domestic masks has dropped a lot compared to March.
Currently, Zong Jun’s company is in a low-profit production stage. He said that if he still wants to produce masks, he needs to have fixed sales channels, otherwise the price of masks may continue to drop in the future. The current mask industry will slowly return to the industry conditions before the epidemic. In addition, there will be a cycle for manufacturers to settle accounts, during which they need to advance funds, so some companies are considering withdrawing from this industry. Not only domestic and foreign markets are also reducing prices, because the supply of masks is becoming increasingly abundant, and foreign companies are also coming to China to purchase equipment to produce masks.
On the whole, because the overseas epidemic situation is still not stable, mask manufacturers will have a much easier time if they have the qualifications to export overseas.
This is the case for Zhang Xin’s company. Because the masks it produces are of high quality and are recognized in the industry, the company was operating at full capacity during the epidemic.
“There are actually many types of masks. We specialize in making flat masks. At the peak, the export price was US$0.65 per piece.”
Zhang Xin said that in the beginning, the price of masks doubled every week, with the highest peak from mid-March to mid-April. After that, various domestic factories began to transform into mask production, and prices gradually dropped. However, because most factories do not have export qualifications, the export price of masks has little impact, and domestic mask prices are the first to fall. At present, the company’s export price is relatively stable, between 0.17 and 0.20 US dollars, and orders are also in a stable state.
Chengdu Ruizhi Jianhe Medical Equipment Co., Ltd. also mainly exports. Li Zhongxun said that the price of the masks produced by the company began to drop significantly from the end of April, and fell to 0.6-0.7 yuan by mid-May. At present, The price dropped to around 0.4 yuan.
Photo/Xinhua News Agency
Who makes the most money in the mask industry chain
At present, the production of masks is in a situation of “hot outside and cold inside”, that is, manufacturers that export masks will have much better profits than companies that only sell masks in the domestic market.
Some people in the industry told reporters that first of all, the export of masks requires corresponding certification. A large number of domestic companies that have switched to producing masks…�Many products produced are actually “three no’s” products, so the competition for export masks is relatively small. Secondly, many export companies have strict control over raw materials and are highly recognized by the market.
In addition, as the production capacity of mask raw materials has exploded, the price of mask raw materials has also dropped significantly. Taking melt-blown cloth as an example, Zong Jun said that melt-blown cloth was previously priced at a maximum of 700,000 yuan/ton, but now the purchase price is 36,000 yuan/ton, which is already 1/20 of the highest price, but the price is still one day A change.
From the perspective of the mask industry chain, the most profitable ones are actually the manufacturers of mask machines.
Take Topstar, a listed company that released its 2020 semi-annual performance forecast on July 9, as an example. The company expects to achieve a net profit attributable to shareholders of the listed company of 382-408 million yuan in the first half of 2020, year-on-year. The growth rate was 344.69%-374.69%, which greatly exceeded expectations.
Guoyuan Securities pointed out in the research report that in the first half of the year, the company relied on the advantages of good mask machine performance and stable supply to exceed expectations, and shipments to leading customers are still rising. It is expected that there will still be demand for mask production-related equipment in the short term, and the current mask market is clearing, the head effect is obvious, and the export qualification threshold has been raised, which has caused export customers to turn to equipment suppliers with mature technologies.
Photo/Xinhua News Agency
However, a large part of the high profits of mask machine manufacturers is paid by domestic mask manufacturers. High-priced equipment has also become an important reason for mask manufacturers to insist on production.
Zong Jun said that although the domestic mask production capacity is becoming increasingly saturated, he has not considered changing production because during the peak period of the mask industry, new mask equipment was bought at a very high price. Now the price of the equipment has been reduced and it is selling. If you go out and make a loss, if you don’t produce, you’re just a pile of scrap metal. However, he plans to produce a series of protective clothing products in the future, because he can still see profits in this area.
Zhang Xin said that in the future, the company will also launch more other types of medical products in addition to masks to carry out diversified development.
Some insiders pointed out that, like most profit-making industries, with the influx of a large number of manufacturers and sufficient supply of goods, the mask industry will gradually enter a period of normalized profits. </p
