Global production capacity and demand of melt spun polypropylene nonwovens
In 2022, due to the installation of extremely advanced new production lines and the response to the surge in demand caused by COVID-19, more capacity is being put into the market. We estimate that 159000 tons of new capacity will be put into production in 2021, most of which are Reicofil 5 technologies. This capacity was ordered before the epidemic, and full capacity utilization was soon achieved. We estimate that about 192000 tons of new capacity will be put into production in 2022, bringing the capacity to about 5308.8 thousand tons. Most of the production capacity was ordered at the end of 2020. However, the supply chain disruption and travel restrictions prevented technicians from installing, and the number of new equipment ordered waiting for installation was huge, so some of the production capacity that should have been put into use in 2021 was facing delays in production.
In 2023, we expect the industry to put 128,000 tons of new capacity into production. In general, we estimate that there will be about 502000 tons of spunbond capacity put into production between 2021 and 2025. This means that the production capacity will increase by more than 10% compared with 2020.
Spunbonded polypropylene nonwovens industry has made great progress in developing new, high-yield and reliable manufacturing technologies, and in developing innovative products that are more attractive to end users. Although the significant increase of these new capacities has had an impact on market capacity utilization, manufacturers around the world continue to install the most advanced technologies to gain product and productivity advantages.
At the end of the third quarter of 2021, the demand will begin to decline, and will decline sharply in the fourth quarter of 2021. Compared with 2021, we expect that the demand will continue to decline moderately by 2022, and the demand and year-on-year growth will return to normal and gradually return in 2023. In this case, we expect that the low birth rate in almost all regions of the world will put pressure on the demand for baby diapers. During this period, the annual growth rate of adult incontinence demand will be between 5-6%.
We expect that the annual growth rate of global demand (in tons) will be about 5% from 2021 to 2026. The predicted prospect is very sensitive to macroeconomic factors, disease shocks and global turbulence. South Asia (India) and Africa have the highest demand growth, followed by the Asia Pacific region and China. The demand growth in North and South America, Greater Europe and the Middle East will be more moderate.
It is expected that by 2024, supply will exceed demand in some parts of the world, because the full impact of new capacity will be fully reflected in the market. This increase in capacity may be offset by the closure of early technologies that were put back into use during the COVID-19 epidemic. The cost of raw materials will remain volatile and disproportionate among regions. In general, we expect the cost of raw materials to rise.
In this context, due to uncertainty and rising investment costs, we believe that once the next round of investment occurs in 2024, the investment in plant and equipment may slow down. This expectation may be affected by the retirement of early production lines. We also expect manufacturers to upgrade their existing capacity to enhance the capacity of the original equipment.
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