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Precoating film refers to the process of laminating plastic film with paper print after pre-gluing and rewinding. The precoating film structure is composed of substrate and adhesive layer. According to different substrates, the precoating film can be divided into BOPP precoating film, BOPET precoating film and BOPA precoating film. The adhesive layer is mainly EVA hot melt adhesive and LDPE hot melt adhesive. Downstream mainly applies to the packaging of books, food, medicine, daily necessities and other products in the field of industrial printing, digital printing, card certification, anti-counterfeiting, commercial advertising and construction materials in the special products market in the field of commercial printing.

Market scale of precoating film

In 2018, China' s pre-coating film output was close to 200000 tons. Beijing Kangdexin is the pre-coating film manufacturer with the earliest start, the largest output and the highest market share in China. Its products are also sold to more than 70 countries and regions in North America, Europe and Asia. Due to technology and capital constraints, other domestic manufacturers mainly focus on the middle and low end markets. In addition to supplying domestic products, some of their products are also exported to Southeast Asia. At present, the export volume of domestic precoated film is about 10000 tons per year.

According to the statistical analysis of the research report of China Research Puhua, " Investigation on the Development Status of the Pre-coated Film Market and Analysis and Prediction Report on the Supply and Demand Pattern in 2020-2025" , it is shown that:

Section I Development of China' s pre-coating industry

1、Analysis of the development of pre-coating industry in 2018

Different from the traditional instant coating film, the pre-coating film refers to the process of laminating the plastic film and then laminating it with the paper print. The pre-coating film structure is composed of the substrate and the adhesive layer. According to different substrates, the precoating film can be divided into BOPP precoating film, BOPET precoating film and BOPA precoating film. The adhesive layer is mainly EVA hot melt adhesive and LDPE hot melt adhesive. Downstream mainly applies to the packaging of books, food, medicine, daily necessities and other products in the field of industrial printing, digital printing, card certification, anti-counterfeiting, commercial advertising and construction materials in the special products market in the field of commercial printing.

The production cost of pre-coating film mainly comes from raw materials, especially base film materials, accounting for nearly half of the operating cost. Taking Kangdexin as an example, its raw material cost accounts for 80%of its total production cost, of which the base film material(BOPP and BOPET)accounts for 45%, and the adhesive layer(EVA and LDPE)accounts for 35%. Because these two raw materials are primary chemical products of petroleum refining, they are upstream in the whole chemical industry chain, and their price trend is basically the same as that of crude oil. If the price of BOPP, EVA and other raw materials fluctuates with the oil price, the pre-coating film manufacturer will generally adjust the price to transfer the cost change to downstream customers. For example, the cost of pre-coating only accounts for about 1%of wine boxes and printed books. Even if the company raises the price by 5%, the sensitivity of downstream customers is also very low, so the mechanism of pre-coating cost transmission to downstream is relatively strong. If the pre-coating enterprises expand to the upstream and master the production of BOPP base film materials, it will be more beneficial to control the production cost of the pre-coating film.

Chart:pre-coating film industry chain

2、Development trends of China' s pre-coating industry in 2018

At present, the downstream industry of precoating film in China is developing rapidly. The industrial printing field has maintained a steady growth, while the commercial printing field(only pre-coated film can be used, and currently only card and poster advertising are widely used)derived from the rapid development of digital printing has developed faster; Among them, the growth rate of the commercial printing market is more than 8%, and the growth rate will be even higher if the emerging fields such as building insulation are considered.

3、Analysis of business performance of pre-coating industry in 2018

The main factors affecting the profit level of the pre-coating industry are:

First, changes in the prices of raw materials and products. Both are closely related to the price of crude oil, and the change of crude oil price will be transmitted downstream along the industrial chain. However, to the advantage of the precoating industry, the proportion of precoating film in the total cost of downstream products is usually small, and downstream users have a low demand elasticity. Even if the precoating film manufacturers raise prices due to the rise of upstream raw material prices, the downstream printing enterprises and distributors will not reduce the purchase volume of precoating film for this reason, and the precoating film manufacturers can effectively transfer the cost pressure to the downstream, To ensure its own profit margin. On the other hand, the upstream raw materials of the precoating film are in a state of oversupply, which is a fully competitive market. The precoating film enterprises have strong bargaining power over the middle and low-end raw materials suppliers.

Second, technological progress. Generally, leading pre-coating companies can reduce production costs and improve profit margins by developing new technologies. However, when advanced technology is gradually mastered by most enterprises, the level of profit margin will return to the average.

4、Development hotspot of China' s pre-coating industry in 2018

With the sustained, healthy and stable development of China' s macro-economy, the domestic market demand will gradually become the main driving force of China' s GDP growth. It is benefiting from the continuous growth of the downstream demand market that China' s pre-coating industry has maintained rapid development in recent years, with the continuous progress of industry technology, and the overall capacity of the industry has gradually expanded. In addition, the adjustment of national industrial policy has also brought new development opportunities to the pre-coating industry.

While China' s pre-coating industry is facing development opportunities, it is also facing challenges brought by industry development. With the continuous participation of many enterprises at home and abroad, the market competition of China' s pre-coating industry is becoming increasingly fierce, and the industry development situation is grim. Facing the opportunities and challenges brought by the market development, mastering the accurate market information, development trends and development trends of the pre-coating industry has become the key for domestic and foreign enterprises to formulate development and competitive strategies.

Section II Supply and demand of China' s pre-coating film market

1、Supply analysis of China' s pre-coating film market in 2018

As the current national awareness of environmental protection has been greatly enhanced, the technical progress of the domestic printing industry has continuously improved the requirements for the quality of film coating. Under the influence of the precoating industry' s further reduction of the cost of precoating film through scale efficiency and product technology improvement, as well as under the promotion of national industrial policies and standards, the substitution of precoating technology for solvent-based instant coating technology is an inevitable trend in the development of China' s film coating market.

Chart:Analysis of China' s pre-coating film production from 2016 to 2018

In 2018, China' s pre-coating film output was close to 200000 tons. Beijing Kangdexin is the pre-coating film manufacturer with the earliest start, the largest output and the highest market share in China. Its products are also sold to more than 70 countries and regions in North America, Europe and Asia. Due to technology and capital constraints, other domestic manufacturers mainly focus on the middle and low end markets. In addition to supplying domestic products, some of their products are also exported to Southeast Asia. At present, the export volume of domestic precoated film is about 10000 tons per year.