Hot demand + insufficient production capacity EVA resin photovoltaic material may usher in a high boom period of more than 2 years

Since the beginning of this year, benefiting from the explosion of downstream photovoltaic film demand, EVA resin has become a popular photovoltaic industry chain, products in short supply.

"with the rapid growth of the photovoltaic industry, the market demand for EVA resin, especially high-end photovoltaic materials, is hot. Under the long construction cycle of new production capacity and the trend of domestic substitution, enterprises with high-end EVA resin production capacity are expected to fully enjoy the industry dividend in the next 2-3 years." A senior industry personage in Shandong told the Financial Associated Press.

The reporter learned from downstream photovoltaic film enterprises that the current market price of high-end photovoltaic materials for EVA resin has risen to 21000 yuan / ton, the highest level in history, and the current ordering cycle for domestic products is more than one month, while imported products take longer.

Photovoltaic industry drives demand for EVA resin

EVA resin (ethylene-vinyl acetate copolymer) is a general polymer, which is widely used in photovoltaic film, foamed shoes, functional greenhouse film, hot melt adhesive, wire and cable and other fields. The VA (vinyl acetate) content in EVA resin is usually 5% Mel 40%, and the VA content also directly determines the properties and application scenarios of EVA resin.

In the photovoltaic module, the EVA film is placed between the toughened glass plate and the solar cell to encapsulate and protect the battery sheet. At present, photovoltaic film accounts for nearly 40% of the downstream applications of EVA resin in China, which is the largest downstream application of EVA resin. The rapid development of photovoltaic industry has also greatly increased the demand for EVA resin.

Statistics from the National Energy Administration show. By the end of April, China's installed solar power capacity was 260 million kilowatts, an increase of 24.3 percent over the same period last year. Some analysts said that in the next five years, the average annual installed capacity of global photovoltaic is expected to reach 242GW, and with the arrival of the "carbon neutral" vision and the era of parity, photovoltaic is expected to gradually become the main energy from the current auxiliary energy.

Zhongtai Securities Research News believes that by 2023, the total global demand for photovoltaic film will reach 3.136 billion square meters, of which transparent EVA film and white EVA film are expected to reach 2.183 billion square meters. Based on the public information, it is conservatively estimated that every 100 million square meters of EVA film consumes about 45000 tons of EVA resin, so it is estimated that the demand for EVA resin will reach 982400 tons in 2023, an increase of 92.2% over the same period in 2020.

A shortage of supply for a period of more than two years.

On one side is the rapid growth of demand, while on the other is a serious shortage of supply.

The reporter learned that although the supply of domestic EVA low-end products is relatively adequate, there is a large gap in the supply of products with high VA content, especially photovoltaic grade EVA resin. Due to the high difficulty of technology and process, about 60% of domestic EVA photovoltaic materials need to be imported. Only Lianhong Xinke (003022.SZ), Silbon, Ningbo Formosa Plastics 3 enterprises can produce photovoltaic grade EVA resin.

The data show that in 2019, the domestic production of photovoltaic EVA resin is 134000 tons, the consumption is 531900 tons, and the consumption gap is 397900 tons.

Domestic photovoltaic film leader Foster (603806.SH) told reporters that the current domestic products of EVA photovoltaic materials and imported products have almost no difference in price and performance, but the ordering cycle of imported products is usually longer than domestic products for a month, while the domestic production capacity of EVA photovoltaic materials is limited, the company mainly imports EVA resin, the raw material for photovoltaic film production at this stage.

The huge gap between supply and demand leads to a large number of domestic enterprises to expand production, but as the construction or upgrading of EVA capacity equipment takes a long time, the whole construction process usually takes about 2 years. In addition, after the EVA plant is completed and put into production, it will take about one year's commissioning cycle to reach a stable production state.

It is reported that last year, Sinochem Quanzhou Petrochemical, Yangzi Petrochemical, Yanchang Yulin Phase II, and Zhongke Refining and Chemical Co., Ltd. have all completed the commissioning of the four units, but due to the commissioning cycle of the plant, the start-up time of the plant is not yet clear.

A number of industry people believe that in view of the advantage of short ordering cycle of domestic EVA photovoltaic materials, downstream enterprises are usually more inclined to order products produced by domestic manufacturers. Under the leadership of this demand, coupled with the long construction cycle of new capacity, the shortage cycle of EVA photovoltaic materials may be maintained for more than 2 years, which provides opportunities for domestic EVA photovoltaic production enterprises.

The performance of production enterprises is very popular.

For listed companies, Lianhong Xinke has an annual production capacity of about 30,000 tons of EVA photovoltaic materials. According to the relevant person in charge of the company, due to the hot market demand, the company's main products EVA photovoltaic materials orders are full, the company has increased the production line of EVA photovoltaic materials, but the products are still in short supply.

According to the announcement, Lianhong Xinke achieved an operating income of 1.803 billion yuan in the first quarter and a net profit of 270 million yuan, an increase of 53.70% and 173.40% respectively over the same period last year. The company said that the continuous growth of demand in photovoltaic, cable and other downstream industries has led to a significant increase in the sales price of its main products EVA compared with the same period last year. In addition, the OCC project raised by the company has reduced the unit consumption of raw methanol by about 10% since 2020Q4 was put into production, which has significantly reduced the company's production cost.

Zhongtai Securities expects the company to achieve net profit of 991 million and 1.186 billion respectively from 2021 to 2022, an increase of 57.64% and 19.61% respectively.

Oriental 000301.SZ announced in May that it planned to buy a 100 per cent stake in Silbon by issuing shares and paying cash. The company believes that EVA is expected to maintain a high boom in the next two years. Silbon is one of the few private enterprises in China that master the key technologies of EVA high-end products and achieve import substitution. The completion of the acquisition will greatly improve the company's profitability.

Financial data show that, benefiting from the rising prices of EVA and other major products, Silbon achieved an operating income of 4.7 billion yuan in the first quarter of 2021, with a net profit of 1.02 billion yuan, nearly double that of the whole of last year.