China's Mask Makers See Raw Material Prices Soar 20-Fold on Supply Bottlenecks
Lin Zhiyin | Hu Huawei
DATE:  Mar 03 2020
/ SOURCE:  yicai
China's Mask Makers See Raw Material Prices Soar 20-Fold on Supply Bottlenecks China's Mask Makers See Raw Material Prices Soar 20-Fold on Supply Bottlenecks

(Yicai Global) March 3 -- The price of melt-blown fabric, a key raw material for the manufacture of face masks and surgical gowns needed to combat the spread of the novel coronavirus, has surged by as much as 20 times in China as demand outpaces the rate at which factories can increase output.

Nonwoven fabric, which blocks the spread of droplets and filters out bacteria, used to cost CNY20,000 (USD2,864) a ton, but prices have now soared to between CNY300,000 (USD42,976) and CNY400,000 a ton, an employee at a mask manufacturer in the southern city of Dongguan told Yicai Global.

"There were only a few producers of this fabric in China before the epidemic," the employee said. "Now the fabric is expensive and difficult to buy and its quality cannot be guaranteed. Many fake products have appeared on the market."

"Several sellers on the social messaging app WeChat claim to have fabrics in stock, but no one can produce an examination report when asked," a staffer t a mask producer in Shenzhen said. "It's really annoying!"

"The main reason for the surging price is a shortage of supply," an analyst from chemical product industry website Oilchem said.

"China only has around 10 mass producers of the material and their combined capacity is about 82,000 tons," he said. "They're operating at full steam and aren't taking any more orders until mid- to late March. Logistics are also disrupted by the epidemic control measures."

It takes time to expand capacity, according to an equipment manufacturer for nonwoven fabric production. It usually takes eight months to produce the machinery and then a further two to install and test it, he said. This makes it difficult for the fabric industry to quickly increase supply.

Demand to Outstrip Supply

In 2018, China produced 53,500 tons of melt-blown fabric for use in the manufacture of masks and other products such as clothing, battery diaphragms and cleansing materials.

Nonwoven fabric is in turn made from polypropylene resins. Normally 20,000 tons of polypropylene are needed a year. Supply remains adequate despite the increase in orders, due to the challenges to growth faced by fabric makers.

"Our daily capacity is only around 100 tons, not enough to meet the rising demand," the head of a polypropylene manufacturer said. The company is still selling its plastic polymers for CNY10,000 (USD1,432) a ton, but has not decided on the price for new orders placed after the middle of March, he added.

China Petrochemical, better known as Sinopec, will invest CNY200 million (USD28.7 million) to build 10 melt-blown fabric production lines in Beijing and Yizheng city in eastern Jiangsu province to help overcome the shortage, the state oil major said on Feb. 24. The two production lines in Beijing's Yanshan district are expected to start operations this month, while those in Yizheng should start next month.

"It usually takes at least half a year to build a fabric production line, but now we must finish one in half a month," the head of Sinopec's equipment unit said. "We can only manage this with the full co-operation of our equipment supplier China Hi-Tech Group."

The 10 production lines will have a daily output of 12 tons of fabric for N95 masks or 18 tons of fabric for surgical masks. That is enough to make 3.6 million N95 masks a day or 18 million surgical masks.

Subsidiary Sinopec Shanghai Petrochemical has also successfully transformed its equipment to produce the materials needed by nonwoven fabric makers and began supplying manufacturers last month.

Editors: Tang Shihua, Kim Taylor

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Keywords:   Novel Coronavirus Pneumonia ,Masks