In the early days of the COVID-19 outbreak, medical masks and other medical protective products were in short supply. Driven by policy support and other factors, China's production capacity of masks has increased rapidly, effectively addressing the problem of tight supply and contributing to global COVID-19 prevention and control.

With the normalization of epidemic prevention and control, the price of masks showed a downward trend, and the import and export trade of masks gradually stabilized. In the face of possible overcapacity problems, relevant enterprises should make timely adjustments. In addition, the environmental problems caused by traditional masks have aroused widespread concern in the society, and the upgrading of product materials may become one of the key breakthrough directions of relevant enterprises. How to realize the transformation and upgrading of the mask industry is worth pondering by the industry.

The industry is developing rapidly

According to the Ministry of Industry and Information Technology and Soochow Securities Research Institute, only 3.9 billion masks were produced in China in 2017. China will produce 10.1 billion masks in 2020 and 9.4 billion in 2021 (see Figure 1).

At the same time, China's daily production of masks is also growing rapidly. Data from the Ministry of Industry and Information Technology show that in early February 2020, The total production capacity of China's mask industry was more than 20 million units per day, more than twice that of the previous period, ranking first in the world. According to the National Development and Reform Commission, by the end of February 2020, China's mask industry could produce 110 million masks a day, with a daily output of 116 million.

With the growth of production capacity, the output value of China's mask industry has been increasing year after year, and the growth rate of the medical mask industry is higher than that of the whole mask industry from 2015 to 2021. According to CCID Research, the output value of China's mask industry reached 10.235 billion yuan in 2019, up 12.57% year on year. Among them, the output value of medical mask industry was 5.491 billion yuan, with a year-on-year growth of 15.97%, the highest growth rate in the past six years (see Figure 2 for details). China's medical mask industry is expected to exceed 15 billion yuan in 2025, according to the Research institute.

It is noteworthy that the price of masks in the domestic market is on a downward trend due to the plummeting price of melt-blown cloth, the main raw material. Data from The Big Yellow Pages of Protective Materials show that the average price of disposable medical masks dropped from more than 2 yuan in April 2020 to about 0.2 yuan in December 2020, a drop of nearly 90%. The average price of disposable ordinary masks also dropped from about 1.5 yuan per mask in April 2020 to about 0.05 yuan per mask in December 2020, a drop of nearly 97%.

Both imports and exports are now falling

Data from the General Administration of Customs shows that from January to December 2020, China's mask exports showed an overall trend of first growth and then decline, rising rapidly in April 2020 and reaching a peak value of 99.3 billion yuan in May 2020, and then declining all the way to 6 billion yuan in May 2021. By the end of 2021, China's mask exports have maintained a relatively low operation.

In terms of export markets, the data from the General Administration of Customs shows that the top 10 export markets of Masks in China in 2021 are the United States, Japan, Germany, The United Kingdom, the Netherlands, Indonesia, Canada, Thailand, Vietnam and Italy. Exports to other markets have fallen in varying degrees. The United States is China's largest export market for masks. In 2020, the export volume to the United States reached 103.82 billion yuan. In 2021, the export volume to the United States dropped by a cliff to 23.08 billion yuan, a year-on-year decline of 78%.

Compared with the trend of export value, the import value of masks in China fluctuated more in the short term at the beginning of 2020. Data from the General Administration of Customs showed that the import value of masks in China increased rapidly from January to February in 2020, peaking at 4.39 billion yuan in February and rapidly declining to 320 million yuan in April 2020. From May 2020 to December 2021, the monthly import value of masks in China remained below 300 million yuan.

In terms of the top 10 import sources, the import value of masks in China in 2021 showed a downward trend compared with that in 2020, and remained at a low level overall. According to the General Administration of Customs, Vietnam and Japan ranked first in terms of import value of masks in 2021, with only 140 million yuan each. Imports from South Korea ranked third at 130 million yuan, with the biggest year-on-year drop of 91%.

We should adjust our development strategy in a timely manner

With the support and guidance of policies, and with the influx of capital from all walks of life, China's mask production capacity has increased rapidly in a short period of time. However, it can not be ignored that China's mask industry will face the situation of overcapacity. As a necessity for epidemic prevention, the price of masks rose due to insufficient production capacity in the early stage of COVID-19 outbreak and attracted capital chase, which to some extent led to disorderly expansion of production capacity. In a short period of time, production increased significantly, and the price of masks fell, hitting many enterprises. Therefore, in the future development, enterprises should learn lessons from it, invest rationally and adjust their development strategies in time to avoid repeating the same mistakes.

In addition, with the change of people's consumption concept and the improvement of consumption level, the environmental pollution caused by traditional masks has been widely concerned. The problem of disposal of waste masks needs to be better solved by the industry. It is worth paying attention to that the market of biodegradable masks manufactured by biodegradable materials has a broad prospect, or a new blue ocean with great potential, because they are biodegradable and can effectively reduce environmental pollution.