What’s the craziest thing about the first half of 2020? Meltblown cloth and oil. One rises above the sky, and the other falls below the center of the earth. It is not just petrochemical companies, non-woven companies, and mask manufacturers that have accompanied these two products on the roller coaster, but also financial institutions, investors, and stockholders. When will the next sharp turn come? Faced with this series of “live and see” events, it is difficult for even the most experienced celebrities to judge.
In the A-share market, the concept of masks has been affected by the sharp increase in raw material prices. After becoming a hot topic in February, it returned to the market’s hot spot in early April.
In the consumer field, the supply of masks in the domestic market is basically guaranteed, but there is still a gap in the international market. According to cross-border e-commerce platform statistics, the transaction volume of masks and other related products in early April was dozens of times that in early March, and has rapidly grown into one of the platform’s main categories.
In the production field, the national mask production capacity has increased by about 2 times in the past month. Among the car companies, BYD, SAIC-GM-Wuling, Shaanxi Automobile, etc., and among the textile and clothing companies, such as Sanqiang Underwear, Hongdou, Mercury Home Textiles, etc., more and more companies are switching to the production of masks. The surge in mask production capacity has ignited the previously unknown meltblown cloth and polypropylene markets.
This sudden epidemic has brought about both crises and opportunities. As long as the mask gap exists, it will be difficult for the market to calm down.
Behind the crazy prices is a crazy market
After the domestic epidemic has been better controlled, the resumption of work and production has boosted the demand for masks. Data from the Fourth National Economic Census show that the total employed population of legal entities and self-employed households in my country is as high as 533 million. Based on one mask per person per day, at least 533 million masks are needed every day.
At the same time, the continued escalation of the international epidemic has led to a surge in demand for masks in various countries. Mask manufacturers in some Italian pharmacies are out of stock, with 100 masks selling for as high as 100 euros; masks in German pharmacies have increased in price 24 times in 10 days, selling for about 60 euros per box; Daegu and Gyeongsangbuk-do in South Korea are severely affected by the new coronavirus1 People are limited to purchasing 30 masks; Japan has gradually resumed importing masks from the Chinese market… As of the end of March, more than 100 countries and international organizations have requested relevant materials from my country, including protective clothing, masks, goggles, thermometers, etc. my country, which took the lead in controlling the epidemic, has become one of the main suppliers of urgently needed medical supplies in the global fight against the epidemic.
my country is the largest country in mask production. In 2019, my country’s total mask output exceeded 5 billion, accounting for more than 55% of global production capacity, 70% of which was exported. Before the epidemic, the average daily output of various types of masks in my country was about 22 million, of which the production capacity of medical surgical masks was 2.2 million pieces/day, the production capacity of medical KN95 masks was about 600,000 pieces/day, and the others are used for civilian protection in a wide range of applications. , industrial dust masks and other masks. After the outbreak, 56 million masks were imported from abroad, basically buying out the global supply of masks. Subsequently, various domestic industries entered the market one after another, and more than 3,000 companies transformed themselves into mask production. Domestic production capacity was rapidly increased, and the daily production capacity has already exceeded 100 million. China currently produces 80% of the world’s masks.
Compared with the current daily production capacity, masks with huge gaps have considerable profit margins. According to regulations, medical masks contain at least three layers of non-woven fabrics. The outer and inner layers are made of non-woven fabrics that meet medical and health standards. The middle protective layer is melt-blown cloth, which is made of polypropylene-modified melt-blown material. It is the key to filtration protection and is often called the “heart” of the mask. It has filtering, barrier, heat preservation and adsorption properties. The surge in market demand has caused the supply of meltblown cloth to exceed demand, which has blocked the rapid expansion of mask production capacity.
In the mask production chain, from polypropylene, melt-blown materials, melt-blown cloth to masks, the domestic production capacity of upstream chemical raw materials polypropylene and melt-blown materials is in a stable state. In 2019, domestic melt-blown nonwoven production was approximately 900,000 tons, of which 650,000 tons were used for air, water, and oil filtration, and 350,000 tons were used to make various types of masks. The overall melt-blown production scale is small and the production capacity is low.
However, in just over two months after the outbreak, meltblown cloth has been sold from 16,000 yuan/ton in the past to 690,000 yuan/ton. Yuan/ton, increased 40 times. The reason for the sharp rise in the price of melt-blown cloth is mainly due to the serious imbalance between the supply and demand of melt-blown cloth. Downstream companies and individuals actively bid for purchases, coupled with the promotion of some dealers and other factors, causing the unit price to soar. Even so, most meltblown fabric manufacturers have no stock in stock, and orders must be placed several months later.
In order to ensure the stable price of midstream melt-blown cloth and the supply of downstream mask products, Sinopec has fully intervened in the production of melt-blown materials, melt-blown cloth and masks in accordance with the requirements of the State-owned Assets Supervision and Administration Commission, opening up the entire industry chain of mask production. As the largest supplier of medical and health raw materials in China, Sinopec has expanded twice and quickly built 16 meltblown cloth production lines, including 4 at Yanshan Petrochemical and 12 at Yizheng Chemical Fiber. It is expected that after all 16 melt-blown cloth production lines of Sinopec are put into operation by the end of May, together with the 5 tons/day production capacity of the holding company, the annual melt-blown cloth production capacity will be 10,000 tons.
Demand has exploded, and regular supply cannot keep up in a short period of time. As of April 5, my country’s daily production capacity of disposable medical protective clothing has reached more than 1.5 million pieces, and the daily production capacity of medical N95 masks has reached 1.5 million pieces.��Over 3.4 million. Li Lingshen, president of the China Industrial Textiles Industry Association, said in an interview with CCTV News: “It is expected that by the end of March and early April, our country can produce 200 tons of melt-blown nonwoven materials every day, and can produce 200 million to 250 million masks. Achieve ‘tight balance’.”
Reliable products come from reliable raw materials
A large number of mask and melt-blown cloth production lines are on hold, which has also caused the price of high-melt-index polypropylene, which was previously in sufficient supply, to rise. It is understood that the price of high-melt polypropylene once rose from 9,000 yuan per ton to about 40,000 yuan in two weeks. Even with several quotes a day, the price in the morning and afternoon may differ by 10,000 yuan. Not only price, but also specific sales channels restrict the entry of many companies. Major production companies sell point-to-point, that is, they sell to specific downstream production companies.
Driven by profit, some small and medium-sized enterprises use non-standard low-melt polypropylene to produce melt-blown fabrics and rush production based on a lack of understanding of raw materials, equipment, production processes, etc. There are also many small workshops whose production machines are modified from other equipment and cannot use the special raw materials for melt-blown cloth with a melt index of 1500. What is produced is “melt-blown cloth” that has not been electret treated and has a filtration efficiency of only 40 to 50%. There is a huge difference in filtration efficiency from the melt-blown cloth that meets the standards. These substandard products flow into the market and directly affect the quality of mask products.
In order to rectify the mask market, the Customs launched two heavy blows within 10 days. Starting from April 1, companies exporting new coronavirus detection reagents, medical masks, medical protective clothing, ventilators, and infrared thermometers must provide a written or electronic statement when declaring to the customs that the exported products have obtained my country’s medical device product registration certificate. , in line with the quality standard requirements of the importing country (region). Starting from April 10, designated epidemic prevention items such as masks must pass legal inspection before they can be exported.
What are the standards and basis for customs inspection of medical supplies? Masks involve microbiological indicators, filtration efficiency, breathing resistance and breathing valve air tightness depending on their uses. The reason why medical masks and KN95 masks can block bacteria and prevent droplets is because the middle layer of melt-blown cloth has a higher melting index, and qualified melt-blown cloth has also been treated with electrostatic electret treatment. The melt index of the special material for melt-blown cloth is 1500g/10min. Special raw materials for meltblown cloth are a very niche market, and only a few manufacturers are doing it. While downstream meltblown cloth companies are increasing, upstream polypropylene manufacturers are also stepping up production.
On April 23, Baofeng Energy started building 7 meltblown cloth raw material production lines, which are expected to be put into operation in late May, with a daily production capacity of 80 tons. Baofeng Energy will build a melt-blown special material production line in the Ningxia factory to further extend the industrial chain. The raw material of this production line comes from self-produced high-melt fiber polypropylene products. The company’s integrated production layout in the field of coal chemical industry will achieve a seamless connection from coal raw materials to polypropylene to the production of melt-blown special materials, effectively ensuring the efficient production and stable supply of melt-blown special materials.
Liu Yuanguan, President of Baofeng Energy, said that as a leader in high-end coal-based new materials, the company has built an integrated enterprise integrating “coal, coke, gas, methanol, olefins, polyethylene, polypropylene, and fine chemicals. “It is an integrated poly-production modern chemical industry cluster. The company has always insisted on making the polyolefin industry more refined and refined, and effectively extended the industrial chain according to market demand and future development. The construction of a melt-blown special material production line will, on the one hand, combine its own industrial and technological advantages to quickly and stably supply key products urgently needed by the market; on the other hand, it will also optimize the company’s product structure and enhance the company’s comprehensive competitiveness.
Not only Baofeng Energy, but also regular forces such as Dawn Energy, Nanjing Julong, and Guoen Energy have also expanded production; Shanghai Secco, China Shenhua, China Coal and Chemical and other companies have successively issued statements on It explains the uses of the fiber material brands it produces and sells, and does not guarantee or assume responsibility for the products being used in special fields, calling on customers to use the products correctly; “Two Barrels of Oil” issued a notice that high-melt refers to fiber The intermediate trade billing link is temporarily cancelled, and the sales branch directly connects with end customers, and sets a maximum sales price limit of 11,500 yuan/ton, and is not allowed to lead the market… Faced with masks, the “first outlet of 2020”, upstream companies have limited raw materials Price clearance channels, customs have strengthened export supervision of masks; Xiantao City, “China’s famous nonwovens industry city”, has banned small nonwoven companies and small workshops that produce counterfeit and shoddy products, three-no products, and no production quality assurance, and has successively closed down local All civilian mask manufacturers; Yangzhong City rectified meltblown cloth production enterprises… It has been more than two months since the outbreak. The upstream and downstream of China’s mask industry chain, which accounts for more than half of the global mask production capacity, and all relevant parties have joined forces to launch a “combination punch to ensure quality”. Promoting rational markets and reliable products to protect the global fight against the epidemic once again reflects the responsibility of a major country. </p
