The coronavirus pandemic, which has infected 1,925,138 people and claimed 119,699 lives as of April 14, has boosted demand for masks and prices of polypropylene (PP) fiber, the main material to produce masks. Market sources informed SSESSMENTS.COM that PP Fiber prices in the local China market had skyrocketed by multiple folds. PP Fiber prices were at a range of CNY7,400-7,600/ton ($1,049-1,078/ton) on cash, EXW China basis and including 13% VAT in early April, but sellers were heard to offer at as high as CNY60,000/ton ($8,509/ton) on April 13 and CNY88,000/ton ($12,480/ton) over the weekend of April 11-12.
Masks are in high demand as the pandemic spreads fast outside China. As SSESSMENTS.COM noted, China has increased its mask production by more than twenty times from 200 million/day in March, more than twenty times the amount it made at the start of February. However, it remains insufficient to meet local and overseas demand. Companies from unrelated sectors such as Apple’s supplier Foxconn and automakers from Guangxi Zhuang region have also switched some of its production to masks. BYD Co Ltd, a Chinese manufacturer of automobiles is also producing face mask at present.
This, in turn, boosts demand for melt-blown fabric, the main material to produce both medical and consumer masks. Melt-blown fabric is a fine mesh of PP fibers that act as the filtering layer inside a mask. Data from the China Nonwoven and Industrial Textiles Association showed that China could produce nearly 3 million tons/year of nonwoven fabric, but melt-blown fabric accounted for only less than 1% of that.
Chinese manufacturers are now reducing the output of fibrous materials for diapers and sanitary pads to boost production of materials for masks. Previously, SSESSMENTS.COM reported that state-owned Sinopec invested CNY200 million ($28.36 million), to start ten new production lines of melt-blown fabric, with production lines supplied by its subsidiary Yanshan Petrochemical.
As a result, Chinese PP producers are now taking the opportunity to make more profits by switching their PP Raffia production to PP Fiber. Even there are quite a number of local producers switching production to fiber grade, China still imports from India, Thailand, and Indonesia. A Chinese market participant told SSESSMENTS.COM that China currently has 37 fiber production lines with a total production capacity of 8.29 million tons/year. Among them, 27 production lines are able to produce 6.52 million tons/year of High MI fiber. The current High MI fiber output accounts for 78.65% of China’s total fiber production, compared to 38.7% in 2019.
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