The fast-growing Chinese market for biaxially oriented polypropylene film not only has digested one-time overcapacity, but also has outgrown domestic supply, according to an official from the China Plastics Processing Industry Association.
Sun Dongquan of CPPIA's cast film committee estimates market demand to be 4.4 billion pounds for 2007, while the effective capacity in China totals 4.2 billion pounds.
The Chinese domestic BOPP manufacturing industry consisted of 86 companies and 137 lines at the end of 2006, he said at K 2007, held Oct. 24-31 in Dusseldorf. The firms produced a total of 3.75 billion pounds of BOPP films in 2006.
He said Zhejiang Province leads production, with 1.1 billion pounds of capacity, closely followed by Guangdong and Jiangsu provinces.
As demand exceeds supply, the industry is adding 30 lines and 1.87 billion pounds of capacity this year, Sun said.
Dominating the Chinese market are Bruckner Maschinenbau GmbH at 48 percent, Mitsubishi Heavy Industries Ltd. at almost 30 percent, and DMT SA at 10.5 percent. But local machinery makers are struggling to catch up, though generally their machines are limited in terms of film width, production speed and consistency, Sun said.
Some of China's BOPP film producers still run small operations.
Firms with annual capacity of less than about 27 million pounds can't offer competitive prices, Sun said. Their prices are roughly 6-9 cents higher per pound than those that make 44 million pounds a year.
``The market will eventually push inefficient production out,'' he said.
However, the biaxially oriented PET films sector might be repeating the history of BOPP prior to 2006. Production capacity totaled 1.5 billion pounds in 2006, twice as much as domestic demand. Although China exported 110 million poundss of BOPET films, it also imported 88 million during the same period. On average, machines run at 60 percent of capacity.
Other sectors, such as biaxially oriented polystyrene, are growing. China's output of BOPS sheet reached 110 million pounds in 2006, with about 82 million pounds for exports. There are only two BOPS film manufacturers in China, with a combined output of almost 16 million pounds in 2006.
The development of biaxially oriented polylactic acid film is still at the infant stage, according to CPPIA.
Sun worked with the Beijing-based China Packaging Federation before he joined CPPIA.