By Scott Chin • 06/3 @ 7:04 • Chaos in Meltblown Fabric Industry Chain已关闭评论
Yangzhong City, Jiangsu Province of China, a small sandbar in the Yangtze River. The once peaceful island suddenly became the “hometown of meltblown fabric”, which was unexpected to the outside world. The market is keen, optimizing the allocation of resources and improving the capacity of meltblown fabric. However,the epidemic situation is like a magnifying glass, revealing that huge benefits have driven chaos in the industrial chain, such as disorderly production and soaring prices. In particular, inferior goods are abundant and the quality of products is worrying. Meltblown fabric is the core material for mask protection. Meltblown fabric manufacturer must carry out production and operation in strict accordance with the standard and orderly compliance, and the product quality must withstand strict supervision.
Before the outbreak, the price of meltblown fabric was less than 20,000 yuan/ton. During the epidemic, the demand for masks soared, the supply of meltblown fabric fell short of demand, and the price skyrocketed. The quotation was updated once in half a day, even reaching 700,000 yuan /ton. Despite this high price, meltblown fabric will be sold instantly. Taking the price of a ton of meltblown fabric at RMB 600,000 as an example, 350,000 pcs N95 masks can be produced. In addition to machine depreciation and consumables, the cost of an N95 mask is RMB 3.5. During the epidemic, the purchase price of middlemen was RMB 6 per mask, and a mask was profitable in RMB 2.5. A ton of meltblown fabric could earn more than RMB 800,000.
As a result, in Yangzhong city ,a small city of China, small and medium-sized enterprises and even family workshops rushed to become meltblown fabric manufacturer. Even if the price of the meltblown fabric machine has doubled, they can still make a fortune. The investment in a production line is less than 1 million yuan, and the products produced are not even up to Grade 90. The normal standard products should be above Grade 95. Output 200kg per day, cost can be recovered in two weeks. After that, every day is “printing money”, earning RMB 50,000-80,000 a day.
It seems easy to get rich overnight. A common extruder, two die heads, PP fiber materials, plus transformers, rollers, etc., the equipment can be easily purchased locally. Then find someone to debug the machine, the production line is completed, and the goods can be shipped on the same day. At the same time, there is no need for salespeople, sensitive middlemen and downstream mask manufacturers to take the initiative to find them and even pay a deposit before supplying them. Those who have a good relationship must also make full payment, pay the money in one hand, deliver the goods in the other hand, and sometimes need to make an appointment to queue up. County-level cities with a population of 340,000 have registered more than 800 meltblown fabric manufacturers.
The market is so magical that it naturally forms a social division of labor and a trading network: suppliers of polypropylene raw materials, various kinds of equipment, machine commissioning personnel, logistics and transportation, and middlemen acquisition…
Raw materials, meltblown fabric, production equipment, mask machine, an industrial chain all feel like “electric shock”. It is this unordered and explosive growth that has led to the intermingling of good and bad products. On April 10th, Yangzhong Market Supervision Bureau’s random inspection results of 8 local meltblown fabric manufacturers showed that only 3 of the meltblown fabric manufacturers’ products, the meltblown fabric filtration efficiency meets more than 95% standard, the worst filtration efficiency is only 39.4%.
A swarm of people joined melt-blown fabric production, but it was exposed due to the worrying environment and quality. The local government took drastic measures and imposed high pressure on it. At present, all meltblown fabric manufacturer in yangzhong city have been shut down. “Shock Therapy” Collapses Yangzhong Meltblown fabric Market overnight.
On April 11, a press conference was held in Yangzhong City, Jiangsu Province to announce that the local meltblown fabric chaos would be centrally controlled. On April 17, the Yangzhong municipal government issued a public announcement, which suddenly stopped people immersed in the craze for making money from meltblown fabric. The local government implemented the strictest rectification measures, from the original “all family workshops are banned” to the later “all factories and workshops are closed”, which was intended to respond to a large number of queries from the previous “fake, profiteering, dirty workshops”.
Before the reorganization, Yangzhong meltblown fabric could reach 70 tons per day, with uneven quality and a large number of inferior goods, which is worrying. Although a small amount of meltblown fabric can still be found in Yangzhong city, it cannot pass through the traffic checkpoints set by the government without formal procedures.
Meltblown fabric manufacturer controlled by the government is mainly supplied by Sinopec Group and China National Petroleum Corporation. Its price is far lower than the market price and it promises not to raise the price. And outside the control China meltblown fabric market, the price to 600,000-700,000 yuan/ton. The same commodity, two markets and two price systems. During the epidemic, as the price of meltblown fabric rose and the price of masks rose, the government began to strictly limit the price of medical masks.China’s large enterprises assume social responsibility to keep melt-blown fabrics from rising in price and continuously supplying them.As a result, the melt-blown fabric market appeared the phenomenon of double-track price system.
Sinopec Group said that the meltblown fabrics produced by them are “directionally supplied” and have never been entrusted to other units or individual meltblown fabric manufacturers. The news that the Sinopec meltblown fabrics are widely sold in other channels is false information.
At present, the price of meltblown fabric in the market has not dropped significantly, but the price of masks in the downstream has dropped significantly. With the improvement of the epidemic situation, the ex-factory price of N95 masks has now dropped to 7 yuan, and even reached 10 yuan before. The price of civilian masks has fallen all the way. At present, the ex-factory price is 0.6 yuan -1.2 yuan per mask, while the previous price was as high as 2.5 yuan per mask.
“The epidemic situation is like a magnifying glass, revealing industrial problems. What needs to be improved is the supervision of product quality. Whether it is for large enterprises or small enterprises, the supervision should be more and more strict.” A Chinese government official said that the exorbitant price and chaos of meltblown fabric are related to a large number of small workshops of meltblown fabric manufacturer. The production is scattered, not easy to supervise, and the quality is mixed. However, too many middlemen have driven up the price of meltblown fabric. If market demand does not change, this state cannot change in the short term. Only when demand and supply are balanced will prices return to normal levels.
It is understood that the regular supply of meltblown fabric as the main force is far from meeting the market demand at present, and more targeted supply is adopted. Long investment cycle and high construction cost make it difficult to supply meltblown fabric in a short time. According to statistics, China’s meltblown nonwoven production capacity in 2018 was 83,240 tons, with an actual output of 53,523 tons. Under the epidemic situation, this output is far from enough, the supply is less than the demand, and the price rises accordingly. As of April 24, there were 4,477 meltblown fabric manufacturers in China, 2,638 enterprises new since 2020.
According to statistics in early April, China’s meltblown fabric production capacity is about 180,000 tons, equivalent to 500 tons/day. Up to now, Sinopec’s daily output of meltblown fabric is 16.5 tons. Even if all 16 meltblown fabric production lines are put into production by the end of May, plus the holding company’s 5 tons/day production capacity, Sinopec Group meltblown fabric production capacity is only 35 tons/day.
Recently, there has been a sharp increase in the number of small and medium-sized mask manufacturers, resulting in competition for meltblown fabric. Since March, China has exported more than 120 million masks a day. According to estimates, the volume of smuggled exports through various means is far greater than this figure. In addition, according to the current demand for mobility and travel, the daily average demand for masks in China is about 400 million to 500 million. Therefore, the exorbitant profits of masks are still not affordable for the time being. There are still many people who make “low filtration meltblown fabric and masks”.The inferior meltblown fabric is sold at 350,000-600,000 yuan/ton. Such a profit opportunity is enough to make these people take risks.
How to ease the supply shortage in China? From the working practice of Sinopec Group, it is important to increase the supply of masks, increase mask production lines and melt-blown fabric devices. However, in the face of the reality of “small mask products” and “long-term industrial chains”, it is necessary to focus on the industrial chain collaboration of “polypropylene special base material-melt-melt-melt-blown fabric-mask” to improve the operation efficiency of the industrial chain. “In order to increase production of meltblown fabric in China, Sinopec Group will build a total of 16 meltblown fabric production lines in the future, and 10 have been put into production.” A person in charge said.
Listed companies also actively practice social responsibility. In the Spring Festival of 2020, TEDA, a subsidiary of TEDA, is clean. Five production lines produce nearly half of the mask filter materials in China every day. As of April 15, TEDA cleanly produced 813.69 tons of mask filter materials, which can produce 632 million flat masks and 63.47 million N95 masks.
Dawn is the largest supplier of PP meltblown materials in China. 24-hour full-load production. By April 21, daily output had increased from 120 tons/day after the Spring Festival to 460 tons/day through production increase, expansion and transformation. The upstream of dawn shares is a large refining and chemical company, the downstream is a meltblown fabric manufacturer, and the further downward extension is a mask manufacturer. “At present, the upstream supply is sufficient and stable. The industrial chain of mask fabric is stuck in the middle reaches of meltblown materials and fabrics. ” The person in charge believed that the production capacity was limited. Polypropylene meltblown materials used for mask fabric were different from meltblown materials used for other purposes. The meltblown materials for mask fabric required stable high flow, electrostatic protection, antibacterial, low odor, low ash content and no residue of other products. This makes it very difficult and challenging for meltblown fabric manufacturer to increase production through equipment modification in the short term.
Many enterprises in China that did not make masks originally began to produce masks. If the epidemic ended, would there be overcapacity and oversupply? The epidemic spread and the demand for short-term masks soared, breaking the balance of supply and demand in the mask industry chain. After the epidemic, there will be an oversupply situation in the enterprises that directly produce masks, but the upstream raw material enterprises and the middle-stream meltblown fabric manufacturer can adjust their production capacity and switch products so as not to have overcapacity. Because meltblown materials and meltblown fabric are not only used for masks, but also widely used in the fields of diapers, sanitary napkins, thermal insulation and sound insulation materials, filter materials, etc.
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