CHINAPLAS '12: BOPP film industry suffers from squeezed profit

19 April 2012 16:59  [Source: ICIS news]

SHANGHAI (ICIS)--The biaxially-oriented polypropylene (BOPP) film industry is suffering from squeezed profit caused by the high cost of feedstock polypropylene and overcapacity, an executive at Zhejiang Kinlead Packaging Material said on Thursday.

"In the last few years, the total BOPP film capacity in China has grown rapidly, with the growth rate of BOPP about 15% from 2009 to 2011," the company offical said.

"However, the downstream demand doesn’t grow as quick as the BOPP film capacity, causing overcapacity of BOPP in China,“ he added on the sidelines of the four-day Chinaplas exhibition, which closes on 21 April.

“To make things worse, the feedstock of polypropylene prices are rising for several months while the prices of our products are almost stable. Nowadays, our traded prices of BOPP were under our costs of current goods.

"Domestic BOPP producers are lingering in an awful position of slim margins and have been compelled to suspend offering, reduce production or shut down to minimise loss and risks," he added.

Zhejiang Kinlead Packaging Material limited, with a capacity of around 110,000 tonnes/year, is one of the biggest producers of BOPP film in China.

The company plans to expand its capacity to 150,000 tonne/year in late 2012.

By: Lizzie Yu

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