Private newcomers struggle as mask production ebbs

As domestic demand for face masks plunges thanks to the ebb of the COVID-19 outbreak in China, small newcomers to the sector are now struggling to make a profit.

“In only 40 days, I lost 780,000 yuan ($109,536),” Liao Yongwang, a 31-year-old businessman in Shenzhen, South China’s Guangdong Province, told the Global Times.

When masks were still in tight supply in mid-April, Liao bought a KN95 mask machine costing 850,000 yuan and sold masks to a factory. But in less than a month, he faced a nightmare -- the factory stopped buying the masks in May due to a glut.

Liao put his machine up for sale on May 13 at a minimum price of 190,000 yuan, but he’s had few inquiries. To repay debts of hundreds of thousands of yuan, he is now working as a porter.

Liao’s experience reflects the struggles of many newcomers and speculators in the mask sector. A face mask machine producer in Guangzhou even posted an ad online, aiming to sell 100 machines at low prices, with immediate delivery.

Ironically, at the early stage of the epidemic, it could take one or two months to have a machine delivered.

The price of melt-blown fabric, a key material in medical masks, dropped sharply too. Chen Lianjie, an executive at Zhejiang Kanglidi Medical Articles Co, said that the price of the material has dropped by two-thirds from a peak in April to about 200,000 yuan a ton now.

Large volumes of low-quality melt-blown fabric were squeezed out of the market due to tightened regulations and industry standards. In April, authorities in Yangzhong, a city in East China’s Jiangsu Province, banned 867 companies from making the fabric.

While small newcomers feel the most pain, large enterprises that shifted to manufacturing face masks are finding it easier to change course as orders dry up.