China's EVA foam material market is climbing steadily

The rapid development of China's manufacturing industry, especially the vigorous development of the footwear industry, the luggage industry, the toy industry, the sporting goods industry and the building materials industry, will drive the sustained and rapid growth of the domestic demand for EVA foaming materials. The market size will reach 30 billion yuan by 2015.

The production and application of China's EVA foaming materials started late, but due to the excellent processing performance of the products and their wide application, especially the vigorous development of the footwear industry, the luggage industry, the toy industry, the sporting goods industry, and the building materials industry, EVA foam will be promoted. Sustained and rapid growth in material market demand.

Despite the weakening of downstream export demand under the impact of the global financial crisis, the market size in 2010 still 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 China's EVA foam material market will maintain rapid growth in the next few years. 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 of EVA foam materials from the top five companies in the market are close to 2 billion yuan, accounting for only 10% of the market share, and the concentration is not high.

The main raw material of EVA foam material is EVA. Currently, the demand for EVA foamed materials accounts for more than 60% of total domestic EVA consumption. As China's consumption of EVA foaming materials has increased year by year, which has driven demand for EVA, the average annual growth in demand for EVA in China has exceeded 7% in the past few years. 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 material, energy, and transportation costs, EVA import prices have been rising. In 2009, due to the decline in international crude oil prices, EVA production costs 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.

The major downstream industries of EVA foam materials, namely footwear, luggage, toys, sporting goods, and building materials, are traditional strong industries in China's manufacturing industry. In 2010, the industry output value exceeded or approached 100 billion yuan, including construction materials. The industry output value 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 rapid growth of market size will attract more companies, but technical barriers, especially the requirements for recycling renewable energy performance of EVA foam materials, as well as the scale and funding barriers, will restrict the entry of small-scale, under-capacity enterprises. 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.