In just the past year of 2023, global input inflation, escalating geopolitical conflicts, slowing growth in commodity demand, and increasing operational risks have caused the global economy to fluctuate. As a member of the end products of petrochemical and coal chemical industries, EVA plastic is also difficult to stand alone, and the overall market is deeply affected by the macro environment. On the other hand, the EVA industry has also gained opportunities for development in China in 2023. Can the heat of China's EVA industry be ignited in 2024, and how will the market trend be? This forecast report will take you forward to the EVA market situation this year.
Currently, China has become a major consumer and importer of EVA. Although the proportion of import dependence on products is gradually decreasing, there is still a significant gap. The strong demand has driven the import of EVA to fluctuate and rise. Compared to the import volume, China's EVA export volume is very small. It is expected that in 2024, the products of domestic local enterprises will still be mainly used to meet the domestic market demand, and the import and export pattern will remain unchanged.
At the same time, with the continuous advancement of infrastructure in various fields, EVA terminal products have achieved stable growth. Under the combined action of these factors, the demand for EVA will continue to increase in different sub sectors. According to relevant calculations, due to downstream demand, domestic EVA consumption will continue to grow at an annual rate of 8.4% in the next five years. It is expected that the domestic EVA consumption in 2024 will not be less than 3.4 million tons.
In the downstream consumer sector, traditional industries such as foam shoe materials and cables have seen slow growth in consumption in recent years, resulting in lower than expected overall demand and long-term pressure on the EVA market. In recent years, the photovoltaic power generation industry has developed rapidly. Last year, the domestic photovoltaic power generation grid connected installed capacity was about 170GW or more, which is about 95% higher than the total installed capacity of 87.41GW in 2022. The production of photovoltaic power generation modules has significantly exceeded expectations, driving a surge in demand for photovoltaic film. The consumption of EVA photovoltaic materials in 2023 exceeded the forecast at the beginning of last year, and the overall consumption accounted for more than half.
Due to the constraints of international climate agreements and other legal provisions that require countries to bear corresponding carbon reduction responsibilities, the research and application of new clean energy will be long-term, and the market space of related industries will continue to expand. On the other hand, controlling carbon emissions is an inevitable choice for China's sustainable development, and energy substitution is an important path. As a relatively optimal solution, photovoltaic power generation schemes have received strong policy support in recent years. According to the prediction of the China Photovoltaic Industry Association, the installed capacity of photovoltaic power generation equipment will continue to grow this year, and the total demand for EVA will continue to rise due to the boost of photovoltaic film.
At present, the demand for EVA in both domestic and foreign markets is vast, and it has become a business that domestic refining enterprises are eager to layout. According to the existing investment and construction plans with announced completion dates, China's new EVA production capacity will be at least 900,000 tons/year by 2024, and it is expected that the total domestic production capacity will reach over 3.35 million tons/year by the end of the year. If calculated based on the average domestic load of 85% last year, it is expected that the total production of local enterprises in China will reach over 2.84 million tons by 2024.
The domestic industry is rapidly expanding and competition is significantly strengthening. In addition, except for some coal chemical bases, EVA enterprises in China are mainly concentrated in coastal areas, with East China's EVA production capacity accounting for up to 66%, and East and South China accounting for 90% of the total domestic consumption. The production and sales pattern is dual centralized. It is expected that the EVA industry will continue to compete for cost reduction and efficiency improvement this year, and further mature.
According to the monitoring of SunSirs, the EVA market for the year 2023 began to rise at 13,633.33 RMB/ton at the beginning of the year, but turned volatile and fell by the beginning of the second quarter. As of December 31, the EVA price was 11,433.33 RMB/ton, a decrease of 16.14% for the whole year, and the overall trend rose and fell.
In 2023, the EVA market prices are under pressure and will decline. In the first quarter, the installed capacity of photovoltaics significantly exceeded expectations, and the demand for stocking drove the market up. After the positive demand for photovoltaic materials is phased out, the demand for traditional industries is low and overall is lower than expected. In the third quarter, prices rebounded slightly, and the seller camp had a willingness to raise prices, but they all suffered successive defeats after rebounding. Subsequently, the weak decline continued until the end of the year, and prices have fallen to a three-year low.
Based on the previous analysis, there are three prominent points in the domestic EVA market pattern:
Firstly, there is a double increase in supply and demand. China's EVA production capacity is rapidly expanding, and the downstream photovoltaic industry has huge demand potential. The supply and demand of the EVA market will inevitably increase in 2024.
Secondly, policy support. In recent years, whether it is the pressure of international carbon reduction or the frequent support policies for the domestic photovoltaic power generation industry, the research and production of EVA products will continue to be promoted.
Thirdly, competition intensifies. EVA production in China is concentrated in the southeast coast, while consumption is concentrated in East and South China. The explosive expansion of production capacity will inevitably intensify market competition.
Overall, with the comprehensive promotion of the domestic economy and infrastructure construction, the EVA industry chain and the field of residential life will also achieve stable development. Under the combined action of these factors, the demand for EVA in different sub sectors will steadily increase. Especially in the photovoltaic industry, it will continue to maintain a high-speed growth momentum.
But as more new players enter at lower levels, the popularity of EVA products will inevitably increase. The increasingly fierce competition in the EVA industry will give rise to higher end and cheaper products, and the industry will gradually mature while achieving significant development. Therefore, the focus of the EVA market in 2024 may continue to decline.
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