EVA boom continues to increase

On September 6, the ex factory price of EVA in petrochemical enterprises generally increased by 1000~2000 yuan/ton, and the market price continued to rise with an increase of more than 20.5% compared with August.

On the one hand, with the improvement of the demand for foaming materials in September, the purchase enthusiasm of the terminal factory has improved, the traders' inventory is low, the spot circulation in the industry is tight, and the support of the photovoltaic module export orders, the terminal adhesive film factory has made up a moderate amount of warehouse, and the purchase volume has increased compared with the previous period.

In the third quarter of this year, EVA industry enterprises made considerable profits and the operating rate reached a new high.

In the third quarter, the average production cost of crude oil line EVA was 11041 yuan/ton, up 1.62% compared with the same period in 2021. The average profit of petrochemical enterprises in the third quarter was 10617 yuan/ton, up 23.50% compared with the same period in 2021. The trend of ethylene monomer is mainly shock downward, and the price of vinyl acetate drops sharply. Therefore, EVA production cost is lower than that in the early stage, while the factory price of the production enterprise is raised accordingly, petrochemical enterprises have a large profit margin, and the operating rate of the unit is greatly improved.

From July to August 2022, the operating rate of EVA production enterprises will reach more than 82%, generally higher than the same period last year. In July, the petrochemical plant was shut down periodically for maintenance, which affected the normal commencement of the plant; In August, the unit operated normally, mainly producing photovoltaic materials, and there was no frequent production change plan. The operating rate of the unit increased significantly, reaching a new high in the year.

It is reported that EVA is a composite material prepared by copolymerization of ethylene and vinyl acetate, which is widely used in photovoltaic adhesive film, foamed shoes, wire and cable, hot melt adhesive, coating materials and other fields.

The high landscape of the photovoltaic industry has driven the market demand for EVA adhesive film. EVA adhesive film, with its excellent packaging performance, good aging resistance and low price, occupies more than 50% of the market share, and is the most widely used solar cell packaging adhesive film material.

In recent years, with the rapid development of photovoltaic industry, China has become the country with the largest EVA production and consumption in the world.

However, in recent years, domestic EVA is still highly dependent on imports. According to the data of Guojin Securities Research Institute, before 2020, China's dependence on imports of EVA resin has always remained above 60%.

However, with the gradual release of new domestic production capacity, the supply of domestic EVA resin has gradually increased. The domestic EVA output has increased from 352700 tons in 2014 to 1007400 tons in 2021. The dependence on imports has decreased to 54.4% in 2021, and further decreased to 42.4% in the first half of 2022. The increase in domestic supply has led to a gradual decline in the import of EVA. In 2021, the domestic import of EVA resin will decline by 5.12% year-on-year to 1.12 million tons, and in the first half of 2022, it will decline by 9.1% year-on-year to 544900 tons.

Today, new capacity is still increasing.

The rapid growth of global photovoltaic installation drives the demand for EVA resin. It is estimated that the demand for EVA resin by photovoltaic will be 1.05 million tons, 1.243 million tons, 1.51 million tons and 1.781 million tons respectively from 2022 to 2025. However, EVA resin has a long production expansion period and a slow pace of supply. EVA resin manufacturers have a period of more than three years from commencement to production. By the end of 2023, the new capacity of the industry is very limited.

EVA resin import substitution space is about 1 million tons every year. In this context of supply and demand, it is estimated that there is a large gap between supply and demand of EVA resin in recent two years.