How Will Melt Blown Non-woven Industry Develop in the Future?

COVID-19 has been under control in China and therefore the fever of face mask production chain which was once sought after now cools down. However, respite the report that the price of melt blown fabric has slumped by 90%, many producers have made a lot of money from the fabric production. The outstanding achievement of some enterprises in the first season even exceeds that of the whole last year.

Although the fever of melt blown fabric market have cooled down, many factories can still make money from it. However, it is unpredictable whether the market can keep hot in the future, which is determined by the epidemic. Even current market is cooler than the market two months ago, many kinds of non-woven fabric are still in short supply. Particularly, the demand on spunlace and super-fiber for FMCG will increase progressively until the end of this year.

One result of epidemic’s being under control is the price slump of face masks other than 95 or 99. The latter two still cost much and creates considerable profit. Some other low-quality face masks (lower than 90) is neither expensive, nor marketable and therefore is less profitable. But marketing is currently not the problem for high quality face masks. There is an enterprise which can produce melt blown by itself so that price drop of face mask has less effect on it. Independent melt blow production becomes its incomparable advantage. Besides, the enterprise planed to invested other 20 melt blown production line and the first-stage lines have been built and come into use. For the following production line investment, it is determined by the overall future state of market. If there were no market, the investment will be stopped.

Some staff from another melt blown producing factory also represented: Before the epidemic, unit price of melt blown was about RMB 20000 per ton. And during the epidemic, the unit prices increased to at least RMB 50,000 per ton and sometimes up to over 100,000. This unit price led to high gross profit rate and the actual price are related to clients’ ordering quantity. But when it came to the performance in the second half of the year, they also expressed that the epidemic played a role in the later marketing price of melt blown and it was not predicable for the coexist of risk and opportunity.

Anyway, although enterprises avoid the questions on their outstanding achievement, it can be found that their outstanding achievement is pretty high by analyzing some public information. Related data of a supplier for new material shows that its profit of melt blown in the first season of 2020 is about RMB 17 million, nearly taking up 45% of the total profit. The company began to sell medical melt blown since this April. Considering the orders, output and production schedule and some other factors, the profit of melt blown is estimated to cover 40% of its profit in 2019.

Besides, some research institutions maintain optimistic to relative melt blown producers. The price of melt-blow PP soars, which will increase considerable profit for the company we firstly mention above. Its net margin in 2020 might reach RMB 570 million.

In addition, another company supplies spunlace non-woven, hot air non-woven and filament ultrafine fiber non-woven, which are the raw materials for private or medical protection products such as disinfectant wipes and face masks. Although it supplies no melt-blown, its other non-woven products are also in enormous demand. Besides, its sales revenue of the first season increased by 13.82% compared with that of last year and net profit attributable to owners of the parent company by 206.10%. Furthermore, it is estimated that its sales revenue of the first half of this year will have a year-one-year growth at the rate of 29.30%-33.47% and net profit at the rate of 241.80%-266.21%. And the company’s annual net profit will have a substantial growth in 2020.

Melt blown is a kind of non-woven fabric. Non-woven fabric, or non-woven for short, refers to the fabric which is not woven. The non-woven industry can be dated back to 1050s in Europe and America and it was introduced into China in late 1970s. During its development, many techniques were innovated, including spunbond, spunlace, chemical bonding, thermal bonding, airlaid, melt blown and so on.

As the core material for medical mask, melt blown become known by the public. During the epidemic, it was extremely difficult to buy it. But before the epidemic, melt blown is actually less known. Some data shows that output of spunbond non-woven in 2019 was 3.09 million ton, accounting for 49.8% of the total non-woven output. At the same time, the proportion of melt blown was only 1.07%.

Currently, non-woven market is, although not as hot as that two months ago, is still at the state of lacking supply. Demand on spunlace and ultra fiber non-woven still increases. Influenced by the epidemic, foreign demand on non-woven even soars. And there is a huge number of overseas purchase orders since non-woven is in shortage in other countries.

It is estimated that non-woven market can keep hot until the end of this year. But the follow-up situation is difficult to be concluded. Without the epidemic, non-woven industry just needs to meet the usual demand of healthcare industry. But the epidemic helps consumers to change their consumption behavior, awareness and habits and this influence will continue on their consumption on FMCG.

In short term, the epidemic accumulated demand on spunlace and melt blown non-woven. Government and hospital will also increase their reservation of protection utilities. Besides, the demand of the civil on disinfectant and other cleaning supplies will grow. All in all, the epidemic first promote growth of non-woven demand and in the future downstream medical and private healthcare products will also have a demand growth, which will give a further incentive to non-woven industry growth.