Mask prices in China are down 80-90 percent from the peak in early February with production capacity far exceeding demand.
Experts predicted that 95 percent of Chinese mask suppliers would go bankrupt by year-end as domestic demand shrinks in the post-epidemic period.
Shares in mask producers tumbled across the board on Tuesday, with Nanfang Medical down by the daily 10-percent limit, and Yanjan New Material and Zhende Medical dropping more than 8 percent.
The declines reflect the industry’s bleak outlook, where only around 5 percent of mask suppliers — those that are permitted to export under certifications such as FDA and CE — may survive, industry insiders said.
Domestic supplies far exceed demand. In February when the country saw the peak of the coronavirus outbreak in China, there were just a few hundred mask producers in the country. There are now more than 10,000 firms, the Global Times learned.
China’s textile exports in the first six months of the year, including masks, rose 32.4 percent year-on-year, customs data showed on Tuesday.
However, Bai Yu, president of the Medical Appliances Branch of the China Medical Pharmaceutical Material Association, told the Global Times on Tuesday that up to 95 percent of the nation’s producers will go bankrupt, mainly because they do not have the FDA or CE markings that would allow them to export. These companies’ production capacity is sufficient to supply the whole world.
“Even if every person on Earth wore a new mask each day, China’s production capacity would still be excessive,” Bai said.
A manager of a mask factory in East China’s Shandong Province surnamed Liu told the Global Times on Tuesday that the company may slash production or even close plant to cut its losses as domestic demand falls.
“Our production capacity escalated from tens of thousands per day at the peak of the outbreak to nearly 1 million, which exceeds demand,” he said.
The company is applying for export certificates, but it takes time to complete the complicated procedures, Liu said.
High costs for raw materials are also hurting the industry.
Chen Hongyan, an industry analyst, told the Global Times that many producers bought raw materials and equipment at very high prices during the peak. But as mask prices continue to decline, the only way to stay profitable is to sell high-cost, high-level protective masks like KN95 to overseas markets.
A man wearing a face mask waits for a bus at a bus stop in downtown Yangon, Myanmar, July 7, 2020. (Xinhua/U Aung)
