Global Spunbond/spun Fused Polypropylene Nonwovens Capacity Analysis And Forecast

As the most cost-effective and highly flexible nonwoven technology, spunbond and spun-fused nonwovens account for the largest share of the market, largely due to its importance in the hygiene market. The spunbond and spunmelt market will continue to grow despite competition from technologies such as thermal bonding, spunlace and hot air. According to Price Hanna Consulting's analysis and forecast of the global spunbond/spun fused polypropylene nonwovens production capacity from 2017 to 2022, we can see what this highly competitive market is.

By the end of 2017, the global production capacity of spunbond/spun fused polypropylene nonwovens was slightly below 4.4 million tons. According to the announced expansion plan, capacity will increase to approximately 4.8 million tons by 2022, equivalent to an annual growth rate of 1.8%. Since our forecast does not include unannounced capacity expansion, and there may be more production line investment later, the actual global capacity in 2022 may be slightly higher than the current estimate.

Currently, approximately 84% (344,400 tons) of new capacity between 2017 and 2022 is expected to be operational by 2019. New capacity since 2012 has led to oversupply in some regional markets. New capacity in the Americas, Middle East and Europe is expected to slow down in 2017-2022, with Asia Pacific, South Asia, China and Africa growing at a relatively high rate.

2017 to 2022

Capacity growth in South Asia (India/Other), Africa and Asia Pacific is expected to be higher than the global average, with annual growth rates ranging from 3% to 8%; annual average capacity growth rates in Greater Europe and North America are around 1.5%. Because these regions are oversupply, they need to absorb capacity. In South America, the market is oversupply. Due to lower-than-expected demand, some production lines have been idle, old production lines are closed, and demand is expected to improve in the later period. In the Middle East, after a period of substantial expansion After that, the market was oversupplied; the increase in new capacity in North Africa and the increase in demand were lower than expected, and this oversupply situation further deteriorated. Compared with the previous period, China's capacity growth is expected to be moderate, and market penetration and capacity base will increase significantly over time.

During 2017-2022, the annual growth rate of global demand for spunbond/spun fused polypropylene nonwovens is expected to be 4.7% (by weight) and 4.8% (by area). In view of this demand forecast, global overcapacity will be partially absorbed, but capacity utilization in various regions of the world will be uneven.

The higher demand growth by area is associated with the use of lower gram weight nonwovens in sanitary products, which results in a slightly lower demand by weight. We believe that the downward trend of the weight of nonwoven fabrics has basically reached the end, and the weight of the products has stabilized or may tend to increase.

Demand in emerging markets is expected to grow at a higher rate, with market penetration of disposable and durable nonwovens not yet fully realized. The regions with the highest market growth (by weight) in 2017-2022 are expected to be Africa, South Asia and China, and Asia Pacific. It is expected that there will be some attractive growth in Greater Europe, while demand in North America, South and Central America and the Middle East will maintain moderate growth.

The largest market for spun polypropylene nonwovens is disposable hygiene products (baby and adult diapers and feminine care), which account for two-thirds of the total fine denier and coarse denier polypropylene nonwovens worldwide. Other important markets for nonwovens made from spun polypropylene technology include various architectural applications (geotextile, wall and floor coverings), home furnishing (furniture construction fabrics and carpet backing), medical and industrial protection. Clothes, cars.

The demand for spunbond and spun-fused nonwovens for hygiene products will drive growth. The main drivers of demand for disposable sanitary nonwovens are birth rate and aging, market penetration and per capita income. These factors play a key role in the projected increase in demand for disposable nonwovens in India, Africa and China.

In India and Africa, market penetration of disposable nonwoven products in health is still low, but is rapidly improving. As the market penetration of Chinese cities is now high, demand growth in rural areas is still low, so China's demand growth has fallen from its previous high. Overall, health demand growth in the Asia-Pacific region remains attractive because of the low penetration rate of disposable hygiene products in some developing countries in the region.

We expect production line capacity utilization to increase between 2020 and 2022. In some areas, this will drive new capacity to meet demand. In some areas of oversupply, demand will be concentrated in specific producers whose capacity utilization will be higher than the regional average.

From historical data, the capacity of spunmelt polypropylene has continued to grow to keep pace with demand growth. However, in the past few years, other factors have emerged to drive the installation of new lines. The demand for lower-weight spun-melt nonwovens cannot be cost-effective through older generations of technology, thus driving the installation of new lines. Recently, the demand for soft nonwovens has led to an increase in two-component throughput, which is one of the methods used in the spunbond process which can be used to produce softer nonwovens.

Second, the latest generation of spunmelting technology offers higher throughput, faster line speeds, finer fiber deniers, higher energy efficiency, digital (smart) process monitoring, high loft and softer materials. This technology has a high production line input cost, but once fully utilized, it can produce lower cost products. The versatility and advantages of next-generation technology will motivate some manufacturers to adopt the latest technology, even before demand is sufficient to absorb new capacity.

Third, producers seek to position their growth markets and deploy them globally to maintain market share. In the past few years, the competitive advantages of strategy and emerging markets have been obvious. We have seen many new producers entering North America, China, South and Central America, Egypt/Africa, Russia, Indonesia and India. Recently, strategic positioning within the global region has resulted in installed production lines closer to the target market in order to minimize transportation costs.

Finally, despite some mergers between producers, equipment rationalization is not enough. Early equipment continued to operate.

We expect the latest capacity to be used first because the technology will produce the best product performance and will be able to achieve the lowest manufacturing costs once the line is fully utilized. A new generation of production lines can replace the older lines that are now running, which can lead to very early technical decommissioning. We estimate that 24% of all fine-denier spunbond capacity still in operation in 2017 is old technology.

In addition to the manufacturer's handling of the new line installation and the rationalization of the old line, the new spunbond polypropylene line will have other effects.

One of the effects is the increasing investment costs of the new spunmelt polypropylene technology, which may prompt some manufacturers to integrate to ease the burden of high investment costs. This problem has driven the introduction of smaller production lines that combine lower cost and advanced spinning technology.

The second related impact is the challenge of technology outdated and requires continued reinvestment to remain competitive. The rapid development of technological modernization has made producers worry about falling behind in the modern competition and have to choose between modernization, repositioning and even exiting the market.

Another issue is the change in imports and exports, as new producers in areas that previously needed to import are seeking opportunities to become exporters.

We have witnessed manufacturers continue to invest in new technologies to stay ahead of the curve and build new plants in developing markets to achieve higher growth. Consolidation between large producers occurs frequently and may continue. Also, mergers between small producers may occur.

The modernization of the spunmelt polypropylene technology platform is taking steps towards health and change. Manufacturers install new production lines to meet growing market demands, respond to market challenges and changing needs. Manufacturers are also working to improve the bulk and softness of spunbonded nonwovens. These advances have exemplified the vibrancy of this leading nonwoven manufacturing technology.

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