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Opportunities and challenges of BOPP industry under continuous losses
!!Wang Hemao, Analyst from Huarui Information

2018-10-26 16:38:33

Mr. Wang divided his presentation into four parts, including BOPP supply-demand situation, market status quo, upstream and downstream sectors, and outlook for BOPP market.

Fast capacity expansion led to overcapacity of BOPP industry and price war, so the capacity witnessed low-speed growth in the following few years, but saw bigger increase in 2017. There is limited increment in 2018 with slower growth again. BOPP capacity is estimated at 6.08 million tons/yr by end 2018 and the start-up of new capacities is expected to slow down further in 2019.

BOPP capacity concentrates in East China and South China, but the growth of Southwest and Central China is higher than that of other regions in recent years. There was hardly new capacities of BOPP industry in 2015-2016 due to overcapacity or saturated capacity, but sharp expansion in 2017 further weighed on the industry as producers suffered losses for long time from break-even level.

Most BOPP plants shut down or cut production with severer deficits in slack season, and yearly growth rate of output is negative. Recently, BOPP plants step into losses again, dampening producers¨ enthusiasm, and some plants chose to suspend operation again.

2019-2020 is the turning point that growth rate of PP capacity turns from low to high.

The sustained low profits make the industrial operating rate stay low and reduce the activeness to start up new capacities. Feedstock will welcome a peak of start-up later and then the industrial profits may recover.
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