EVA foam material market growth continues unabated

The US consulting firm Frost & Sullivan issued a research report in March 2011 and believes that the rapid development of China's manufacturing industry, especially the vigorous development of the footwear industry, luggage industry, toy industry, sporting goods industry, and building materials industry, will drive the The market demand for EVA foam materials continues to grow rapidly.

The rapid expansion of market size The production and application of EVA foaming materials in China started late, but due to the excellent processing performance of the products and their wide application, the demand growth has been very rapid in recent years, and the market is currently in a period of growth. Despite the impact of the global financial crisis, downstream export demand weakened, and the market's compound annual growth rate from 2006 to 2010 still exceeded 9%. In 2010, the market size exceeded 18 billion yuan.

Benefiting from the stable development of China's downstream industries, the requirements and profit enhancements brought about by downstream industry upgrades, and the wider application areas will be exploited and other favorable factors, it is expected that the EVA foam material market in China will maintain high growth. From 2010, the compound annual growth rate will exceed 10%, and by 2015 the market size will reach 30 billion yuan.

The rapid growth of the market has attracted many manufacturers to enter the industry. In 2010, more than 3,000 companies in the Chinese market had the ability to produce EVA foamed materials. Most EVA foam manufacturers are small businesses with annual sales of less than 10 million yuan. The number of large-scale manufacturers is relatively small, with annual sales of more than 30 million yuan, and a high value of 100 million yuan. The total sales volume of EVA foam materials for the top 5 companies in the market is close to 2 billion yuan, only accounting for 10% of the market share, and the concentration is not high.

Raw materials mainly rely on EVA as the main raw material for importing EVA foam. Currently, the demand for EVA foamed materials accounts for more than 60% of total domestic EVA consumption. As China's apparent consumption of EVA foaming materials has increased year by year, it has driven demand for EVA. In the past few years, the average annual growth in demand for EVA in China has exceeded 7%. On the other hand, the dependence of market supply on imports is relatively high. In 2010, the global demand for EVA exceeded 3 million tons. The domestic EVA consumption reached 700,000 tons, while the output was only 270,000 tons, and the self-sufficiency rate was less than 40%.

Due to tight market supply, rising raw materials, energy, and transportation costs, EVA import prices rose from 2006 to 2008, rising from RMB 10,800 (t price, the same below) to RMB 13,600. In 2009, due to the drop in international crude oil prices, the production cost of EVA fell. On the other hand, the financial crisis has also caused the downstream industry's demand for EVA to shrink across the globe. These two factors caused the import price of EVA to fall to 10,200 yuan in 2009. In 2010, with the gradual recovery of the macro economy, EVA downstream demand gradually recovered, while international crude oil prices, EVA supply continues to be tight, resulting in EVA prices quickly rose to 13,500 yuan.

EVA foam prices also fluctuate with EVA prices. From 2006 to 2008, the price of EVA foamed materials rose from 3,150 yuan to 3,600 yuan/cubic meter. By 2009, with the fall of EVA prices, the price of EVA foam materials has also dropped to 3,200 yuan/cubic meter. In 2010, due to the rapid growth of downstream demand and the substantial increase in EVA raw materials, the price of EVA foamed materials quickly rebounded back to 3,500 yuan/cubic meter.

Strong Downstream Demand Growth The main downstream industries of EVA foaming materials, namely footwear, luggage, toys, sporting goods, and building materials, are all traditional strong industries in China's manufacturing industry. In 2010, the industry output value exceeded or approached RMB 100 billion. Yuan, in which the output value of the building materials industry has even reached more than 1 trillion yuan. Driven by further improvement in stimulated domestic demand and export markets, these industries are expected to maintain growth of more than 10% in the next three years.

The shoe market and the luggage industry market are the most important downstream markets for EVA foam materials. In 2010, it consumed about 70% of EVA foam materials in the Chinese market. In the downstream market of EVA foam materials such as toy industry, sporting goods industry and building materials industry, in 2010, about 25% of EVA foam materials in the Chinese market were consumed. The emerging markets, such as automotive interiors and electronic accessories, have consumed a total of about 5% of EVA foam in the Chinese market.

The market with continued rapid growth in the future will attract more companies, but technical barriers, especially the requirements for recycled performance of EVA foam materials, as well as the scale and funding barriers, will limit the scale and capacity The entry of the business. Although there is no product standard for the EVA foaming material industry, the downstream industry's requirements for various types of products, especially the increasingly stringent export standards, also form a strong constraint on EVA foaming materials. Therefore, manufacturers that meet various downstream standards will be in a more favorable position in the competition.

From the upstream perspective, with the expansion of demand for EVA foam materials in the Chinese market, the import volume of EVA will further increase in the future. At the same time, with the technological breakthrough of domestic production companies, the dependence on imports will also gradually decrease. Driven by downstream demand, the market size of EVA foaming materials in China will continue to increase. At the same time, it is expected that large EVA foam material producers will further occupy the market, and the industry will achieve partial industry consolidation through mergers and acquisitions. From the downstream perspective, on the one hand, the demand for the existing downstream industry will continue to be strong, and along with the upgrading of downstream industries, the requirements on the quality and characteristics of EVA foam materials will also increase, and at the same time, it will also bring higher profits. On the other hand, more emerging applications will be developed.