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The global nonwovens industry must now address post-epidemic challenges. The impact of the new crown outbreak that began in 2019 on the global spunmelt polypropylene nonwovens market in 2020 is huge, and demand has now begun to normalize, especially for those product categories that surged during the peak of the outbreak. We estimate that the peak demand for face masks, protective clothing and wipes will peak in mid -2021. Since then, the demand for nonwovens in these product categories has slowed down, and in early 2023, this demand slowed even further. In the medical market, since the third quarter of 2022, the inventory of non-woven coils and disposable medical products has increased in some regions of the world due to the slowdown in demand. The destocking of these medical protection products has already begun, and we think this will continue through most of 2023.

At present, the global spunbond/spunmelt polypropylene nonwovens market ushered in a period of opportunities and challenges. Falling birth rates in much of the world, rising inflation, rising interest rates and rising geopolitical tensions could lead to a further decline in global demand. Nonwovens, on the other hand, have made significant progress in adopting sustainable raw materials, but this may face headwinds as society's concerns about war and the economy rise. Despite the uncertainty, as witnessed during the beginning and duration of the new crown, the nonwovens industry is resilient and able to successfully meet the challenges.
 
Global capacity and demand

In 2022, we estimate that about 239,500 tons of new fine denier capacity will be put into production, mainly composed of Reicofil 5, Fare and China technologies. These new units bring the total global production capacity to 5,351.2 kilotons. This capacity was mainly ordered during the worst of the epidemic, but demand has been declining as the number of infections has continued to decline throughout the year. By the end of 2022, capacity utilization had declined from its mid -2022 peak. We expect an additional 191,000 tonnes of new fine denier capacity to be put into use in 2023, bringing capacity to approximately 5,542.2 kilotons.

By 2024, we expect to have another 110000 tonnes of new capacity in service. This will bring the total global fine denier production capacity to about 5,642.2 kilotons. Overall, we judge that approximately 541000 tons of fine denier spunbond capacity will be put into production during 2022-2024. This will increase capacity by more than 10 percent over 2021, I .e., a CAGR of 2.7 percent from 2021 to 2024. We expect demand and growth to normalize in 2023 and return to normal demand drivers. In this case, the low birth rate in almost all regions of the world will affect the demand for baby diapers. During this period, the annual growth rate of demand for adult incontinence products will be between 5-6%.

From 2022 to 2027, the global average annual demand growth is expected to be around 5%. This outlook is sensitive to macroeconomic factors, disease shocks and global volatility. The regions with the fastest demand growth will be South Asia (India) and Africa, followed by Asia-Pacific and China. Demand growth will be more moderate in North America, South America, Greater Europe and the Middle East. As the full impact of the new capacity becomes apparent in the market, oversupply is expected in some parts of the world by 2024. Offsetting this capacity increase is the potential shutdown of previous generation technologies that were reactivated at the peak of the epidemic.

Raw material costs will remain volatile and disproportionate between regions. Overall, we expect raw material costs to. go down in 2023 and up in 2024. Against this backdrop, we believe that due to uncertainty and rising investment costs, investment in plants and equipment may slow down when the next round of investment is made in 2024. We also anticipate possible upgrades to existing capacity to increase the capacity of existing machines.
 
Capacity and Demand in North America

Between 2022 and 2024, 131,500 tons of new capacity is expected to enter the market. This capacity increase was primarily due to the construction of five new reicofil 5 production lines during the period, including one ordered by Avgol that was supposed to be installed in Russia but was subsequently relocated to the United States. The increase in North American capacity will put pressure on capacity utilization during this period. Capacity utilization in North America was fully utilized in the first half of 2021, but began to weaken in the third quarter as outbreak-related demand slowed. Demand continued to weaken moderately throughout 2022, with demand weakening further in the fourth quarter due to lower demand and increased inventories of healthcare-related products on the back of deliveries of previously ordered items. Inventories of nonwovens medical products will continue to decrease through most of 2023.

We expect demand for hygiene products to remain unchanged and demand for baby diapers in line with low birth rates. The demand for adult incontinence products is expected to grow at an annual rate of 4%, lower than in previous periods due to higher market penetration. As inventories are reduced and demand returns to pre-epidemic levels, demand in the medical market will decline significantly in 2023. Demand in the construction and industrial markets is more attractive, but may face downward pressure on the economy. During this period, capacity utilization will decline as new capacity enters and old capacity is rationalized. We expect capacity to reach 8.969 million tonnes by the end of 2024.
 
South and Central America Capacity and Demand

In South America, capacity utilization in 2022 is slightly lower than in 2021 due to a slowdown in PPE demand related to the new crown, and Fitesa Brazil's reicofil 5(R5) production line, which was put into operation in the second half of 2021, is at full capacity in 2022. While the installation of other large production lines was not announced, several low to medium capacity Chinese-made production lines have been put into use in the region. Demand for disposable hygiene products and other nonwovens market is low to moderate. As the market penetration increases, the market demand growth for adult incontinence continues to be higher than other hygiene product categories. Additional capacity is expected to be added by 2026 to meet growing demand and modernize existing technologies. We expect capacity to reach 354.0 kt by the end of 2024.
 
capacity and demand in Greater Europe including Turkey and Russia

In the Greater Europe region, with new production lines coming into operation at full capacity for Union (Italy) and Innovatec (Germany), and new capacity coming into production for Master Plast (Hungary) and Gulsan (Turkey), capacity has increased by 355000 tonnes in 2022. With Fitesa putting a production line into operation and Gulsan's new production line starting in 2022, the capacity will be increased by 300000 tons in 2023.

Capacity utilization in Greater Europe is uneven among producers and dependent on exports. For most of 2021, capacity utilization was moderate due to the severity of the epidemic and weakened in the final months of the year. During 2022, demand weakened further to more normal pre-epidemic levels. As destocking occurs, demand in the medical market will decline in 2023. Capacity utilization in Greater Europe will remain low in 2023-2024 as capacity exceeds demand growth in regional and export markets. We expect capacity to reach 11.606 million tonnes by the end of 2023.
 
Capacity and demand in the Middle East and Africa

In the Middle East and Africa, the surge in outbreak-related demand provides the region with higher capacity utilization in the first half of 2020 to 2021. In the absence of demand related to the new crown epidemic, high capacity utilization in the Middle East depends on exports to Europe and South Asia. Based on our assessment of demand and imports and exports, capacity utilisation by producers in the Middle East and Africa is expected to remain attractive in 2023-2024, but new production lines in Gulsan (Egypt) and PFNonwovens (South Africa) will be under pressure during this period. Our analysis of the Middle East does not include Iran. Baftineh installed advanced technology in Iran in the second half of 2020 to modernize the company's technology platform and add more product features to its product portfolio. In addition, SGN Saudi Arabia has announced plans to install an R5 production line in Saudi Arabia in 2024/2025.

In North Africa, Gulsan (Egypt) will launch a Reicofil 5 production line with a capacity of 25,000 tons in the first quarter of 2023. At this point, Gulsan increased its production lines in Egypt to three. PFNonwovens will install R5 production line in South Africa in 2023, adding 15,000 tons of production capacity. We expect capacity to reach 192.0 kilotons in the Middle East by the end of 2024 and 197000 kilotons in Africa as a whole.
 
Capacity and Demand in South Asia

In South Asia, as the market penetration of nonwovens continues to increase, demand continues to grow and production capacity surges. Toray, Global Nonwovens, Manjushree Spntek and other producers have increased their capacity in India by 1.025 million tonnes since 2021, 52% more than in 2021. In the fourth quarter of 2020, Toray commissioned a new Reicofil 4s production line at its new facility in India with an annual capacity of 20000 tons. Global Nonwovens launched a 300000-ton R5 production line at its India plant in mid -2022, the company's third production line. Starting in 2015, Global became the first company in India to install high-capacity spinning and melting equipment in the region. In the second half of 2022, Avgol commissioned the transfer of the upgraded Reicofil 3.1 production line from Israel to a second new plant in India. Manjushree launched a new R5 production line in India. The line has a capacity of 15,000 tons and is designed to serve the healthcare and hygiene market. We expect India to install more capacity by 2026 as demand continues to grow. Capacity utilization in the region remains high, and we expect capacity to reach 271.5 kilotons by the end of 2024.
 
Capacity and Demand in Asia Pacific

By 2023, the largest producers in the region are Mitsui/Asahi (Japan, Thailand, 148.0 kilotons), Toray (Korea, Indonesia, 103.0 kilotons), Fibertex (Malaysia, 96 kilotons) and Fitesa/CNC (Thailand, 69.0 kilotons). Mitsui and Asahi Kasei will merge in October 2023 to become the fourth largest spunbond PP nonwoven producer in the world. Asahi Kasei put into operation a production line with a capacity of 15000 tons in the third quarter of 2021, and the production line will reach full capacity in 2022.

Fibertex (Malaysia) commissioned an R5 production line with a capacity of 15,000 tons in the first quarter of 2022. The production capacity of this line will be fully realized in 2023. In the third quarter of 2022, Cobes Industries in Myanmar and Hanil in South Korea put on new production lines. The demand for hygiene products in the region is growing, especially excluding Japan, where the market is fully penetrated. The increase in capacity reflects the increase in demand, and we expect capacity to reach 512.0 kilotons by the end of 2024.
 
China's Capacity and Demand

In China, we expect to start production of 41,500 tonnes of new PP SB/SMS capacity in 2023. In 2022 and 2021, 89.0 thousand tons and 67.5 thousand tons were put into production respectively. This estimate includes new capacity for Allmed, Jofo Wuxi, Berry, Cobes and Guan Hong, all of which will use R5 technology.
China seems to be preparing to add more new production capacity to supply non-woven substrates for surgical gowns and hole towels to the world. Although China is expected to install more production lines in 2024-2026, the annual demand growth for spunmelt polypropylene nonwovens made in China is expected to slow. The increase in capacity and the decrease in demand will affect future capacity utilization. We estimate production capacity to reach 20.037 million tonnes by the end of 2024. China's serious oversupply, restore reasonable capacity utilization will rely on exports.

This article is from Nonwovens Industry Journal
作者：David J. Price，Price Hanna Consultants公司

Source: Jung-International Nonwoven Industry Business