Investment mask report: risk analysis and prospect of domestic mask supply and demand

2020-02-26 10:30

Since the outbreak of COVID-19, the contradiction between supply and demand of masks has been prominent in China, and "difficult to get masks" has become a common phenomenon. In general, the shortage of stocks behind the rapid increase in demand, the shortage of construction due to the combination of the epidemic situation and the Spring Festival holiday, and the contradiction between the emergency demand and the lagging supply of masks are the main reasons for the severe shortage of masks in the short term. However, as the supply of raw materials tends to be stable, the production rate of each province further improves, and the multiple measures such as capacity expansion and production line innovation encouraged by national policies are implemented one by one, the supply and demand of masks will gradually balance in the future.


This issue is divided into three parts, one is the mask classification and the main technical indicators, two is the mask production and marketing chain analysis, three is the domestic mask supply and demand risk analysis and prospects.


I. classification of masks and main technical indicators


Mask is a kind of sanitary articles, it is used to filter the air into the mouth and nose, so as to block the harmful gas, smell, droplets in and out of the wearer's mouth and nose. Generally, it is divided into three categories: civil masks, medical masks and industrial dustproof masks. There are many differences in the application scenes, main features, execution standards and production processes of the three. At present, the production of masks in China is dominated by surgical masks, and the production capacity and output account for more than 50%.

Currently, medical masks are managed as medical devices in China. The products of medical masks are generally made of three layers of non-woven cloth, of which the outer layer is spunbonded non-woven cloth, which is waterproof, and the design of anti-droplets is adopted to block fluids such as body fluids and blood. The middle layer is melt-sprayed non-woven fabric, and the electret treated polypropylene melt-sprayed non-woven fabric is used as the core of filtration. The inner layer mainly USES ES non-woven fabric to absorb moisture.



Ⅱ, mask production and marketing chain analysis


According to the industrial chain division, mask production and sales generally include the upstream raw material production, the production and manufacture of masks in the middle, and the sales of masks in the downstream three links.


Upstream raw materials mainly include polypropylene fiber, non-woven fabric, bridge of the nose strip, ear hanging elastic belt, etc., among which non-woven fabric is the main use of mask production products, while high-melt polypropylene fiber is the core material of production of non-woven fabric.


From the point of technology, ordinary mask by using melt-blown non-woven fabric production method (MeltBlowing) were developed, melt-blown method belongs to the polymer extrusion method nonwoven technology, melt-blown non-woven fabric has the melt-blown materials produced by the method of curved channel structure, particle filter can effectively, filterability of about 35%, also calls the melt-blown non-woven fabric made of non-woven products.


However, the production of surgical masks, need to carry out electret treatment on the basis of the above. The filtration mechanism of medical mask is brown diffusion, interception, inertia collision, gravity deposition and electrostatic adsorption. The first four are physical factors, which are the natural characteristics of non-woven cloth produced by melting spray. However, in order to meet the production standard of medical mask, the fiber should be charged, and the aerosol in which the novel coronavirus is captured by electrostatic. After electret treatment, non-woven fabric can achieve 95% filtration, effectively prevent virus and reach the standard of surgical mask without changing respiratory resistance. Electret - treated high - melt - finger - spray non - woven materials are commonly referred to as medical high - melt - finger - spray non - woven materials.


Ⅲ.Risk analysis and prospect of supply and demand of masks in China


(a) in the short term, mask products, especially medical masks, are still in serious shortage


Since the outbreak of the epidemic, the inventory of mask products in various provinces in China has been rapidly running out, because the covid-19 epidemic has not been fully controlled, the overburden of the Chinese New Year holiday and the increased production difficulties caused by the outbreak have made it difficult to balance the supply and demand of masks in the short term. At the same time, due to the epidemic situation in some countries, there has also been a rush of buying masks, which has restricted the export of products. As a result, the import channels of masks in China have been blocked, which has affected the supply of masks in China to some extent. Ou xiaoli, director of the social development department of the national development and reform commission, said masks are still facing a big gap due to the rapid growth of demand for protective materials due to the progress of the resumption of work and production.


In the short term, the supply bottlenecks are as follows:


01 the outbreak of the epidemic caused a rapid increase in domestic demand for masks, existing stock accelerated consumption


The inventory cycle of mask manufacturers is about 1-2 weeks. In addition, due to the impact of clearing inventory during the Spring Festival holiday, the inventory of masks is relatively limited. At the same time, due to the expiry date of masks, large supermarkets and many hospitals downstream will not stock a large number of mask products, and the inventory of surgical masks in many hospitals is only about one week. The outbreak of the epidemic suddenly, because of the epidemic prevention needs, not only the medical staff, people have a high demand for masks, the original stock in a short period of time was a large number of consumption, a shortage of masks.


The production of 02 masks is affected by the shortage of upstream raw materials supply, which limits the production capacity in the short term.


Hubei province is the main producing area of non-woven fabric for mask production in China. Panchang town, under the jurisdiction of xiantao city, hubei province, is known as the "capital of non-woven fabric", with the output of non-woven fabric accounting for 60% of the country's total output and a quarter of the global market share. Affected by the epidemic, enterprises in hubei province are facing difficulties in starting work. Many production lines of non-woven fabric production enterprises in xiantao city are in a state of shutdown due to the lack of workers, which has caused great pressure on the supply of non-woven fabric products with high melting finger melting spraying. In addition, in order to control the production quality of medical masks and prevent fake and shoddy products from entering the market, xiantao city closed all local civilian mask manufacturers until February 13, which led to the production capacity of masks in xiantao city reduced by more than half.


At the same time, high fusion refers to polypropylene fiber used in the production of non-woven products manufacturer, mainly to liaoning, henan, shandong enterprises, affected by the outbreak of road transport efficiency is lower, and emergency purchase of medical supplies production machine for logistics speed slow and delay the construction schedule, and all products related to different extent, affected the mask production.


Medical masks should be left standing for 7 days after disinfection before they can be put on the market. The supply time is delayed.


In order to achieve the inspection and quarantine standards of surgical masks, according to the production process of surgical masks, the manufacturer shall disinfect the masks in the environment of 400mg/L ethylene oxide (EO) after the masks are formed, so as to inactivate the microbial macromolecules and achieve the purpose of sterilization. However, ethylene oxide is inflammable and explosive, and is a carcinogen, so the mask should be left for analysis for 7 days after disinfection. Only when the residual amount of EO is lower than the required value can the mask be packaged and delivered to the hospital for use by medical staff. Under the premise of production shortage, the product still needs to face a 7-day lag period to market, and the difficulty of short-term emergency is increased.


The import of medical masks in key countries is limited, affecting the use of emergency medical masks in China


According to the United Nations commodity trade statistics, in 2018, the top 10 importers of surgical masks in China were affected by the epidemic in their countries and faced a shortage of masks. As can be seen from the following data, most of the major importing countries in China have also detected confirmed cases, and many countries are among the TOP10 countries in the number of confirmed cases. These countries, especially in southeast Asia, have seen different levels of panic buying and shortages of surgical masks, forcing them to introduce restrictions on supplies. Even if the government does not take relevant measures to restrict exports, Chinese imports are also faced with a shortage of goods or the risk of seller's default in the case of tight domestic supply, which will make it more difficult to import related products.




(2) multiple positive factors, mask supply and demand will gradually balance


In the medium term, as the epidemic situation is gradually controlled, and the state continues to issue preferential policies to encourage mask manufacturers to start production quickly, coupled with the return of logistics after the Spring Festival holiday, the upstream raw materials and production capacity of mask manufacturers will gradually recover and expand under multiple favorable factors. In addition, under the influence of the epidemic, a large number of domestic mask products export to domestic sales has further increased the supply of masks, masks supply and demand will gradually balance.


The state has launched preferential policies and emergency channels to support the production of epidemic materials


Drug regulatory departments will speed up emergency approval of medical devices. In order to carry out epidemic prevention and control, the national medical products administration requires all provincial drug regulatory departments to actively launch emergency approval procedures for medical devices while strengthening quality supervision and control. By February 7, 2020, the provincial food and drug administration had approved 88 applications for registration of medical devices in accordance with the emergency examination and approval procedures for medical devices, including 4 medical protective masks, 17 medical surgical masks, 20 disposable medical masks, and 16 new medical devices within two days. According to the statistics of the national medical products administration, as of February 7, a total of 63 medical protective masks, 171 surgical masks and 364 disposable surgical masks had been approved and registered nationwide.


The state introduced preferential fiscal and tax policies and promised to purchase surplus medical supplies from enterprises. On February 7, the State Council to deal with will be coronavirus pneumonia outbreak zone spreading mechanism held a press conference, conference according to the relevant ministries and commissions of the state, in addition to the epidemic prevention and control the fiscal and taxation policies to support COVID 18-19, soothe small micro enterprise financing difficult financing your relevant information, in order to encourage enterprises to increase the focus of the shortage of medical protective material with good quality production, to stay after the outbreak, such as excess supply related products in the enterprise to all out by the government procurement purchase more focus on prevention and control of medical supplies.


Many provinces and cities with preferential policies to encourage enterprises to put into production as soon as possible. Some provinces and cities encourage enterprises to resume production as soon as possible, have introduced the subsidy policy for the production of mask machine enterprises, up to 50% of the price of each (set) equipment can be given incentives. Guangdong province to buy masks to increase production of mask manufacturers, the maximum subsidy equipment of 80%; For the newly increased loans in 2020 for the key enterprises in epidemic prevention and control designated by the state and the province and other health and epidemic prevention and control enterprises, medical products and medical equipment enterprises that play a prominent role in supporting epidemic prevention and control, the local provincial finance shall give a discount of 50% of the people's bank's re-loan interest rate. Guangzhou huangpu district, guangzhou development zone and guangzhou high-tech zone took the lead in formulating and releasing the first policy of "enterprise warming" in the national development zone, indicating that the enterprise will be rewarded 200,000 yuan for restarting production of masks before February 10, and the rent will be exempted for one month and halved for two months if the enterprise is a state-owned enterprise. A number of provinces, cities and regions have issued relevant incentive policies, including preferential loans, one-time incentives.



02 the supply of raw materials is gradually stable, some provincial and municipal mask manufacturers have started work and production


In 2019, China's polypropylene production capacity was 52 million tons. In 2020, China added only 7.63 million tons of propylene production capacity per year. According to the estimation, 25 billion masks can be produced by 100,000 tons of polypropylene fiber, and there are enough raw materials of upstream polypropylene fiber for the production of masks. With the gradual resumption of production of polypropylene fiber enterprises, the recovery of logistics, the supply of raw materials to solve the problem, can ensure the production of non-woven cloth for mask production.


In this case, China's mask production chain is gradually smooth, mask production provinces are in an emergency to resume the production of masks. According to data released by the national development and reform commission, as of Feb. 11, more than 76% of mask manufacturers in China had returned to work, with the utilization rate reaching 94%.


The production rate of face mask enterprises in shandong province has reached 110.84%. According to the data of the ministry of industry and information technology, as an important production base of emergency materials for epidemic prevention, most of the relevant enterprises in shandong have achieved full capacity production. As of February 6, the production rate of 32 masks in the production enterprises in the province has reached 110.84%, the production rate of 3 protective clothing in the production enterprises reached 100.72%, the production rate of 2 protective masks in the production enterprises reached 115%, the production rate of 3 disinfection alcohol in the production enterprises in the key deployment reached 83.07%, the production rate of 3 disinfectant in the production enterprises reached 52.25%. It is reported that since January 27, solstice February 4, shandong province has produced a total of 19.56 million masks, 73,405 sets of protective clothing, 137,000 protective masks, 106,300 goggles, 75 ° alcohol 1305 tons, 84 disinfectant 12,780 tons.


Shanghai mask manufacturers have all returned to work. According to statistics, Shanghai has a total of 17 mask and auxiliary materials and other production enterprises, has now all returned to work. In the early period of the epidemic, the normal production of Shanghai was about 400,000-500,000 per day, and most of it was exported. On January 27, the daily production can be restored to 800,000 / day, January 28 has increased to 1.1 million, the city's output on January 30 more than 1.4 million, February 4 more than 2.6 million, has reached production, and to meet the epidemic prevention needs, from export to domestic sales.


Enterprises in guangdong province resumed work and launched a robot mask production line. As of February 7, 92 of the 129 medical-supply enterprises in guangdong had started work, and 35 of the province's 37 mask manufacturers had started work. On this basis, in order to improve the production efficiency of provincial masks, enterprises in guangdong province reformed and launched the flexible AI visual automatic mask machine, and began to use the "robot mask production line" to continuously produce masks 24 hours a day, with a daily output of more than 150,000 masks.


The national development and reform commission (NDRC) will provide assistance to mask manufacturers that have not resumed production or are not operating at full capacity. The national development and reform commission (NDRC) said at a press conference on "the state council's response to the joint prevention and control mechanism of novel coronavirus pneumonia" that it would help mask companies that have not yet returned to production to solve personnel and financial difficulties encountered in the process of restarting production and facilitate the resumption of work. For enterprises that have not yet reached full capacity, we will help them to restore their production capacity and support them to work on two or three shifts, so that people can have a rest but machines can't. For enterprises that are able to expand production capacity, investment from the central government budget will be arranged to support them.


Some enterprises outside the industry have added production lines for masks to relieve the shortage of masks


In order to support epidemic prevention and increase the production of masks and other related epidemic prevention materials, some enterprises in the non-line of the industry have added production lines of masks. Such as industrial fulian has issued a notice that the new mask production line introduced on February 5 has been put into trial production. It is expected that the production capacity of 2 million masks per day can be realized by the end of February, which will be used for the internal production of nearly one million employees of foxconn technology group for epidemic protection. Wuling joint suppliers through the redevelopment of the production line production mask, set up 14 masks production line, including 4 N95 mask line, 10 general medical protective mask line, daily output is expected to reach more than 1.7 million, in this month will be completed and put to use, mainly ease the shortage of medical supplies in the area of guangxi.


In addition, byd, daddai baby, sinopec, foci pharmaceutical have added mask production lines, the new production capacity of disposable surgical masks reached 5 million/day, 2 million/day, 1 million/day, 200,000 / day. In addition, Shanghai nursing good industry, mercury home textile, China textile stock, qingsong stock, sanqiang underwear, red bean clothing, news bird and other listed companies or subsidiaries also said that temporary change line to produce masks, medical protective clothing and other business.


According to the standard of registration change information of industry and commerce, since January 1, solstice, February 7, 2020, more than 3,000 enterprises in China have added the business scope of "masks, protective clothing, disinfectant, thermometer, medical equipment", etc., further increasing the production of masks in China and easing the contradiction between supply and demand.


Export to domestic sales can be further increased, domestic mask products supply


China accounts for about 50% of the world's annual production of masks, and is the largest mask producer and exporter. According to the data of the ministry of industry and information technology, China's current mask production capacity is about 20 million/day, and it is estimated that the production capacity of masks can be increased to 35-40 million/day by the end of February. After the arrival of the domestic supply of masks will be guaranteed.