By Sun Dongquan, Executive Chairman of High-performance Film Branch, China Synthetic Resin Association
Biaxially oriented films
Driven by domestic economic development and increased export orders, the total output of China's biaxially oriented films, mainly including biaxially oriented polypropylene (BOPP), biaxially oriented polyester (BOPET), biaxially oriented polyamide (BOPA), biaxially oriented polyimide (BOPI), biaxially oriented polyethylene (BOPE) and biaxially oriented polylactic acid (BOPLA), was about 11.52 million tons in 2021, an increase of about 20% from 2020.
1. BOPP film
According to the survey of Beijing Hesheng Fengmao Information Consulting Co., Ltd., the effective capacity of Chinese BOPP film was about 6.6 million t/a in 2021, and the actual output was about 6.45 million tons, an increase of 19.45% year on year; the operating rate was about 98%, up by eight percentage points from 2020.
2. BOPET film
China's BOPET industry grew fast in 2021, with an improvement in both supply-demand and profitability. The total capacity reached 5.1 million t/a during the year, and the output exceeded 4.7 million tons, an increase of 20.52% year on year. The elevated profits are giving rise to an unprecedented investment boom, so it is expected that the capacity will rise by 100% from 2021 to 2025.
3. BOPA film
The total capacity of BOPA film in China was at 300 000 t/a in 2021, and the output was at 280 000 tons, an increase of 21.74% year on year. Some new application fields were explored during the year, such as aluminum-plastic packaging film for flexible packaging of lithium battery. Indeed, massive capacity expansions by aluminum-plastic packaging film producers in 2021 brought big potential to the BOPA film market.
4. BOPE film
Herein, BOPE refers to the base film used for single material composite flexible packaging. The demand for BOPE film (including exports) in China has been strengthening since 2018. In 2021, the consumption exceeded 120 000 tons, up by more than 100% from that of 60 000 tons in 2020. Given the higher requirements for environmental protection and recycling in the future, it is expected that the BOPE film industry will grow at a fast annual rate of more than 50% in the next decade, so the industry will see great development opportunities.
The total output of casting film in China was about 8 million tons, In 2021, an increase of 14.29% year on year was realized.
1. Casting polypropylene (CPP) film
The total effective capacity of CPP was about 1.4 million t/a, and the output was about 1.15 million tons in 2021, an increase of 4.55% year on year. The operating rates were at 82%. The CPP film industry has been growing at a low pace since 2012, mainly because of a sharp reduction in the demand for instant noodle packaging amid changes in young people's changing dietary habits.
2. Casting polyethylene (CPE) composite film, printing packaging film
The output of CPE composite substrate film and printing film exceeded 600 000 tons, an increase of 20% year on year.
3. CPE winding film
The output of CPE winding film was 2.5 million tons in 2021, an increase of 25% year on year. The capacity was 2.8 million t/a, an increase of 27.27% from 2020.
4. CPE sanitation film
The production of anti-epidemic sanitary film has increased sharply in recent years. However, the output was 700 000 tons in 2021, down by 30% from 2020. The capacity was 1 million tons in 2021, down by 28.57% year on year and the operating rates were at 70%. The main reason for the production cutback was that a big number of production lines that were blindly invested in and put online have stopped production amid a lack of orders and backed out of the market.
5. CPE preservative film, PVC preservative film and PVDC preservative film
The output of preservative films was about 1.7 million tons in 2021, an increase of 13.33% year on year. The capacity was about 2.1 million t/a, an increase of 16.67% from 2020, and the operating rates were 80.95%. Among them, the output of PVC preservative film was about 350 000 tons and the capacity was about 460 000 t/a.
6. Thermoplastic polyurethane (TPU) film
TPU is a thermoplastic elastomer material with the fastest growing demand in recent years. The domestic demand for TPU continues to grow, mainly in the fields of shoe materials, films, wires and cables. In 2021, China's TPU capacity was about 800 000 t/a, and the output was about 500 000 tons, with the output of TPU film at around 130 000 tons, an increase of 30% year on year. Car cover film is an emerging application market for TPU film demand to grow in.
7. Polyimide film (PIF)
From the perspective of material performance, PIF has the greatest market potential in the future, especially in the optical and electronic fields. The output of PIF film in China exceeded 12 000 tons in 2021, an increase of 50% year on year. The market grew fast in terms of the varieties, output, functions and application fields. It is expected that the average annual growth rate will be more than 15% in the next decade.
8. Casting protective film
Protective films are widely used, and the consumption exceeded 1.8 million tons in 2021, up by 20% year on year. Given that the adoption of film blowing process is still overwhelming and that of casting process is quite low, it is urgent for casting film machine makers to accelerate research and development, for casting film producers to carry out technical tests for process and formula and for raw material suppliers to develop specialty materials.
9. Glass laminated film
The laminated glass output in China was at 131.501 million square meters, up by 12.2%year on year.
Among the glass laminated film products, the output of EVA film is minimal, at no more than 20 000 tons per year in China, while the output of PVB glass laminated film takes the lion’s share. In 2021, the output of PVB and EVA glass laminated film totaled about 740 000 tons, an increase of 13.85% from 2020.
10. EVA/POE photovoltaic packaging film
According to the data of China Photovoltaic Industry Association, the photovoltaic industry in China registered steady growth in 2021, with the output of battery pieces and battery modules at 198 GW and 182 GW, up by 46.9% and 46.1% respectively year on year. The demand for PV packaging film in China in 2021 was calculated according to the volume ratio of PV module installation and production of 1:1.2, given that 10 million square meters of PV adhesive film are required for one GW of PV module packaging. Accordingly, the demand was at 2.184 billion square meters, up by nearly 46% from 2020.
It is expected that with the implementation of the national strategy of "Peaking Carbon Dioxide Emissions and Carbon Neutrality", China's photovoltaic industry will maintain an annual growth rate of more than 20% in the next five years, and the demand for photovoltaic packaging EVA/POE adhesive film will be also stronger.
11. Multi-layer co-extrusion barrier packaging film
Typical application fields of multi-layer co-extrusion barrier packaging film:
① Vacuum-packaging for meat and cheese
② Modified atmosphere packaging (MAP) for fresh meat, processed meat and cheese;
③ MAP for fish
④ MAP for bread
⑤ Bulk meat packaging
⑥ Poultry meat packaging
⑦ Packaging for various liquid
⑧ Tubular packaging for toothpaste and cosmetics
12. PVC high-transparency casting packaging film, PVC embossed film
PVC film producers adopted calendering process and blow molding process in earlier time. However, PVC films made by calendering process were relatively thick, at least at 0.04mm, and the power consumption per ton of products was about 800kW. The blow molding process could not produce embossed film and the transparency of products made by the process was poor.
PVC calendered film producers are mainly located in Haining and Ruian of Zhejiang Province.
13. Water soluble plastic packaging film
Soluble packaging film mainly uses polyvinyl alcohol and starch as the main raw materials, plus various additives, such as surface activity, plasticizer and abherent. Different from the traditional plastic film molding process, the process is as follows: first, the raw materials are made into water-soluble adhesive with solid content of 18-20%, and then it is casted and coated onto the mirror stainless steel belt; it is peeled off from the steel strip after the film is formed by drying, and then it is dehydrated to the specified moisture in a drying chamber; and finally it is trimmed and winded into finished film.
14. TPEE non-porous, moisture permeable, and waterproof casting film
The global consumption of TPEE casting film is increasing at an annual rate of 8%, and the domestic demand for TPEE casting film is growing faster, at a rate of more than 10%. In this context, TPEE casting film has great potential for future development.
15. Engineering casting film
Engineering casting film mainly refers to the film made of high-temperature-resistant engineering plastics, and it is applied in some special industries. It consists of PA66 film, PET film, PEN film, polyphenylene sulfide (PPS) film, polyimide (PI) film, PFA film and PEEK film.
16. Other casting films
1. Proton exchange membrane fuel cell diaphragm
The fluorosulfonic proton exchange membrane used in the proton exchange membrane fuel cell has been put into commercial production by now. Shanghai Jiaotong University, Dalian Institute of Chemical Physics, Chinese Academy of Sciences and Shandong Dongyue Shenzhou New Materials Co., Ltd. are the main research and development institutions in China.
Quanchai Engine Co., Ltd. invested RMB750 million in a "hydrogen fuel cell intelligent manufacturing construction project" on December 25, 2020, and the project will include a proton exchange membrane laboratory, a membrane electrode laboratory, a testing center and a workshop. After being put into use, it will provide 20 000 square meters of proton exchange membrane and membrane electrode each, as well as 2 000 sets/year of fuel cell power.
On November 18, 2020, Dongyue’s 1.5 million square meters proton exchange membrane project was put into operation.
On September 7, 2021, Dongcai Technology invested RMB53.2 million to build a proton exchange membrane plant with an annual design capacity of 500 000 square meters.
On August 14, 2021, the State Power Investment Corporation Limited Hydrogen Energy Co invested RMB7 billion to build the largest hydrogen fuel cellproton exchange membrane production line in China.On December 5, the 300 000 square meter proton exchange membrane production line was put into operation.
2. Lithium ion battery diaphragm
A surge in production and sales of new energy vehicles drove up the domestic production of lithium battery diaphragms sharply in 2021. The output reached 8 billion square meters during the year, up by 105% from the output of 3.9 billion square meters in 2020.
Blow molding film
1. Packaging blow molding film
Blow molding film for packaging is one of the largest categories in the film industry, led by PE blow molding film. In 2021, the output exceeded 8.6 million tons, an increase of 7.5% year on year.
2. Agricultural film
The total sales volume of agricultural films was about 2.8 million tons in 2021, including 1.5 million tons of plastic film and 1.3 million tons of plastic film.The capacity of agricultural film in China was about 4.5 million t/a.
Global grain production decreased in 2020 and 2021 amid the COVID-19, and accordingly, some countries restricted grain exporting. However, China's agriculture industry is expected to see greater modern development opportunities in 2022 to accommodate the needs for the national food security. In the context, the agricultural film industry will have great development potential, with a sharp rise to be seen in both supply-demand and profits.
3. POF thermal shrinkage film
There are wide application fields for POF thermal shrinkage film in China. In 2021, the demand was about 180 000 tons, the output was about 240 000 tons, and the export volume was about 60 000 tons.
Status quo and future development trend of aluminum laminated film industry
The main substrates of aluminum laminated film are PET, CPP, BOPP, PVC, and PE. Among them, PET keeps growing rapidly at more than 10%; CPP grows slowly amid the changes in product structure of food enterprises; BOPP also keeps growing at a fast pace, because it is mainly needed by overseas suppliers, who, led by European and American enterprises, prefer to use BOPP heat-sealing aluminum laminated film; PVC and PE are mainly used in the fields of labels and decoration, and the growth is also compelling, but the total amount is small. In general, these materials keep growing at an annual rate of more than 20%. Table 1 shows the relevant data of aluminum laminated film industry in 2021.
Faster technological innovations were seen in the aluminum laminated film industry in 2021, and producers such as Shanghai Yongchao, Zhejiang Changyu, Foshan Cailong and Anhui Tongda reported remarkable technological innovation achievements.
Composite soft packaging film
The demand for China's composite soft packaging film market was strong and the growth was stable in 2021 in line with robust downstream demand. According to incomplete statistics and calculation by a variety of sources, the output of composite soft packaging film in China in 2021 was about 5 million tons, an increase of 11.11% year on year, and the industrial concentration rate increased.
1. Development characteristics of soft plastic film industry in 2021
(1) The virus resurgence severely dampened supermarkets, cinemas, restaurants, tourism, bars and other industries in 2021. As a result, the retail sales of fast-moving consumer goods such as snack food, beverages and beer fell sharply, indirectly affecting the orders for packaging.
(2) The prices of various raw materials and auxiliary materials used for composite soft packaging rose sharply, making the production costs higher.
(3) Environmental protection initiatives as well as restrictions of power and production geared up the industrial reshuffle, bringing great challenges and pressure to business operation. As a result, small producers struggled while medium-sized and large ones outperformed.
(4) Labor costs were rising, but labor shortage remained, implying the crisis in the structural change of population.
(5) Tariffs increased, the number of containers was limited, the cost of oil and freight rose sharply, and exporting business weakened amid the changing global trade situation and the pandemic, which imposed a higher risk to exporters. Export orders in the second and third quarters of 2021 declined significantly compared with the same period of 2020. The market gradually recovered in October and the export orders increased. However, the soaring price of raw materials largely squeezed the margin room. Some foreign trade enterprises reduced foreign orders due to the shortage of international containers and heightened oil charges and turned to the domestic market, which intensified the market competition. Many producers suffered from tiny profits amid the low-price competition, which also resulted in a sharp reduction in the profits of CPP and aluminum laminated film producers supporting composite soft packaging.
(6) Equipment renewal speeded up. The orders for the manufacturing of soft packaging equipment increased in 2021, as some producers asked for equipment renewal to expand production scale, to replace old ones and to meet the requirements of environmental protection.
(7) The share of solvent-free compounding process increased. In 2021, the solvent-free composite process was developed fast. Both equipment and glue enterprises made new technological breakthroughs in terms of the solvent-free composite process of high barrier materials. However, few enterprises made bold attempts in upgrading of high-temperature cooking products such as aluminum foil, and the dry-compound machine still occupied an absolute monopoly position in this field.
2. Development trend in 2022
(1) The problem of labor shortage in the soft packaging industry will inevitably lead to higher requirements for automation, multi-function, humanization design, simple operation, digitization and intelligence of the equipment (such as configuring MES ports, AGVs, automatic small robots for loading and unloading). The technological innovation process of the equipment highlights saving material consumption, saving order conversion time, improving overprinting precision, and adopting ink technology well, saving energy and reducing consumption, reducing workforce, and remote control.
(2) Producers will keep developing functional and recoverable basic films with less consumption of raw materials. There will be higher requirements for the quality and performance of film packaging materials, such as friction resistance coefficient, film flatness, tensile strength, etc., in order to meet the needs of end-users for high-speed automatic packaging machines.
(3) The technology of solvent-free composite as functional materials such as high barrier materials, medium resistant materials and high-temperature cooking is becoming more and more mature, and it is conducting cross field expansion and digital intelligence upgrading.
3. The market prospect of aluminum-plastic packaging film for soft packaging of lithium battery will still be promising
Aluminum-plastic packaging film is not one of the base films, and it is also different from the composite films used for ordinary soft packaging. It is a new field, and has special requirements for equipment, raw materials and auxiliary materials, as well as production process.
The total demand for domestic aluminum-plastic composite films exceeded 400 million square meters in 2021, up by more than 33% year on year, and the total market scale exceeded RMB10 billion. Among them, the demand for aluminum-plastic composite film with thickness of 88 and 113μm for thin digital batteries and 3C mobile batteries will reach more than 300 million square meters, and the demand for aluminum-plastic composite film with thickness of 152μm will exceed 100 million square meters.
The growth in domestic aluminum-plastic composite film industry will progress in leaps and bounds in line with the rapid development of the lithium battery industry. We will see a rapid rise in both investment and capacity. The capacity will increase by more than 50% from 2021 to 2022
The development of aluminum-plastic packaging film will bring stronger demand for high-end BOPA, CPP and aluminum foil.
4. Non-PVC medical composite film
Non-PVC medical packaging film is mainly used in the soft bag packaging of large infusion solutions, and it is also used in other fields such as sterile powder, bulk pharmaceutical chemicals, food for export, fine chemical products and military.
Biodegradable plastics and related films
The development prospect of bio-based degradable plastics is broad, as the material is conducive to reducing and eliminating environmental pollution. Relevant producers should make more efforts in the research and development and promote the application.
The biodegradable plastics market was piping hot in 2021. Some provinces in China, such as Henan and Hainan, issued specific policies to encourage the use of biodegradable plastic shopping bags to replace traditional petroleum-based plastic bags. There were even investments and applications in high-end biodegradable films such as BOPLA and PBAT. However, the biodegradable plastics cannot completely replace petroleum-based materials due to the properties. This, combined with high cost caused by limited resources of raw materials, casts a shadow on the market outlook and margin room. Therefore, producers should be cautious in the market investment.