Is there a problem of overcapacity in the BOPP color synthetic paper industry?

There is indeed a problem of overcapacity in the BOPP color synthetic paper industry, which can be inferred from the overall situation of the BOPP (biaxially oriented polypropylene film) industry. The following is a detailed analysis of the issue:

1、 The current situation of overcapacity in the BOPP industry

The contradiction of oversupply has intensified: In recent years, the production capacity of China's BOPP industry has continued to expand, but the demand growth has been relatively slow, leading to an increasingly prominent supply-demand contradiction. According to data statistics, the overcapacity rate in the BOPP industry has reached a high level, and the supply-demand gap has been widening year by year.

The difference between production capacity and demand is large: From the difference between production capacity and total demand, the overcapacity situation in the BOPP industry is very serious. For example, by 2024, the difference between the two has reached millions of tons, and the overcapacity rate exceeds 40%.

The production of new lines continues: Despite the industry already facing overcapacity issues, the production of new lines is still ongoing. This further exacerbates the problem of overcapacity.

2、 Speculation on overcapacity in BOPP color synthetic paper industry

As a sub product of BOPP, the production capacity and market demand of BOPP colored synthetic paper are also influenced by the overall trend of the BOPP industry.

Limited market demand growth: Although colored synthetic paper has application demand in certain specific fields, overall, its market demand growth is relatively limited. With the increasing awareness of environmental protection and the emergence of alternative products, market demand may be further squeezed.

Difficult to digest production capacity: Against the backdrop of overall overcapacity in the BOPP industry, the production capacity of BOPP color synthetic paper is also difficult to effectively digest. Enterprises may face difficulties in product sales, inventory backlog, and other issues.

3、 The problems caused by overcapacity

Intense price war competition: In order to compete for limited market share, companies may engage in fierce price wars, leading to further compression of profit margins.

Idle equipment and resource waste: Overcapacity may also lead to idle equipment and resource waste. Some companies may lower their operating rates or even face the risk of production stoppage due to insufficient orders.

Increased pressure on industry consolidation: Against the backdrop of overcapacity, the pressure on industry consolidation may increase. Some weaker companies may be merged or eliminated, while stronger companies may enhance their competitiveness by expanding their scale and improving their technological level.

In summary, there is indeed a problem of overcapacity in the BOPP color synthetic paper industry. This issue not only affects the profitability of enterprises, but may also have adverse effects on the healthy development of the entire industry. Therefore, enterprises need to closely monitor market dynamics and adjust their production structure reasonably to cope with the challenges brought by overcapacity.