The ceiling of the POP industry is low and the market development space is limited.

POP is a type of polyolefin elastomer, which is produced by copolymerization of α-olefin monomers. Its α-olefin monomer content is less than 20%, so its density is higher than POE. POP is mainly used as a heat sealing layer for film blowing, extrusion, and casting. It has the advantages of high toughness, transparency, low sealing temperature, and tear resistance. It is widely used in fresh food, meat processing, milk, hygiene, medical care, diapers, etc. There is a high demand for packaging applications in detergents, washing powder and other products.

In the world, only South Korea’s LG, South Korea’s SK, Dow and Sabic produce POP. Their production capacity has remained at 1.3 million tons/year in the past five years, but the actual output is less than 500,000 tons. In terms of production planning, both Wanhua Chemical and Dow currently have devices under construction and are expected to be put into production in 2025. The total production capacity of the projects currently under construction is 720,000 tons/year. POP and POE devices are versatile. Currently, the demand for POE applications is higher. Most companies focus on POE production, so the actual output of POP is low.

According to the “China POP Industry Application Market Demand and Development Opportunities Research Report 2022-2027” released by the Industrial Research Center, in China In the market, no company has yet realized POP production, and the fastest to be built is Wanhua Chemical’s device. POP has a wide range of applications and high domestic demand, but domestic companies cannot meet market demand, so the annual import volume of POP is high. In the past five years, with the rapid development of my country’s economy and the development of the food industry, the demand and requirements for packaging have increased, which has benefited the development of the POP industry. Therefore, the import volume of POP has continued to rise in the past five years. In 2017, my country’s POP import volume was 43,000 tons, reaching 67,000 tons in 2019. However, due to the impact of the epidemic, the import volume decreased, and the import volume in 2021 will be 65,000 tons.

There is not much difference between the import price of POP and POE. However, affected by the epidemic in 2020-2021, POP supply is tight and product prices have increased. However, it is expected that by 2025, my country’s POP equipment will be put into production, import volume will continue to decrease, and product prices will also decline. my country’s POP is mainly imported from Dow. The main product brands are 1900, 1950, 1880, and 021 from SK. It is mainly used in the packaging of personal care products, food and beverages.

From a development perspective, the application scope of POP is extremely limited and is mostly used in the field of food packaging. However, BOPP occupies the main market in this field, and compared with BOPP, POP is more expensive and does not have a competitive advantage. Therefore, with the commissioning of Wanhua Chemical’s POP project, China’s POP market may experience overcapacity.

Industry analysts said that although POP has excellent performance, its application scope is limited and there are many substitutes, and POP has no competitive advantage. Therefore, there are relatively few application requirements and the industry ceiling is low. At present, there is no domestic enterprise capable of producing POP, and domestic market demand relies on imports, which mostly come from Dow of the United States. However, with Wanhua Chemical’s deployment in the POP field, it is expected that domestic substitution will be achieved by 2025, and there may be the risk of overcapacity by then.