[Introduction] Over the past five years, the BOPP industry has experienced rapid development, resulting in a supply-exceeding-demand pattern. The 15th Five-Year Plan calls for optimization and upgrading of traditional industries, enhancing capacity optimization and accelerating integration and scaling processes to effectively alleviate supply-side pressures. Guided by the core objectives of the 15th Five-Year Plan, BOPP capacity expansion may decelerate starting in 2027. Continuous industry optimization and upgrading, coupled with accelerated integration to reduce costs and enhance efficiency, are expected to drive sustained positive development in the BOPP sector.

Industrial Optimization and Upgrading: BOPP Capacity Growth May Accelerate Initially Before Slowing Over the Next Five Years

The BOPP market entered a new expansion cycle from 2021 to 2025, with production lines exceeding 10 per year except for 2021, which saw 6 lines commissioned. According to research by Zhuochuang Information, China's BOPP industry capacity is projected to reach 8.3304 million tons by the end of 2025, an increase of 1.4669 million tons compared to 2021. This rapid expansion is primarily driven by industry profitability, with companies signing production line agreements and achieving mass production within this period. As China's BOPP capacity continues to grow, the industry enters a phase of overcapacity, marked by significant supply exceeding demand. Competition intensifies across regions, exerting downward pressure on BOPP prices and gross margins.

Entering the 15th Five-Year Plan period, the government has mandated optimization and upgrading of traditional industries. Looking ahead to the 15th Five-Year Plan period, the BOPP industry still has 36 production lines and over 2 million tons of capacity awaiting deployment. If fully released, total capacity is projected to exceed 10 million tons by 2030. However, considering the current market oversupply and industrial upgrading requirements, the pace of capacity expansion in the BOPP industry is expected to gradually slow down starting in 2027. Outdated capacity will be phased out, leading to industry consolidation. Additionally, starting in 2024, influenced by national policies to “prevent internal competition,” the BOPP industry has seen increasing voluntary production cuts and reduced operating rates, a trend expected to persist. As industrial optimization and upgrading advance, supply-side pressures are projected to remain manageable, thereby positively impacting the market.

Accelerated Integration Process Highlights Synergies in the BOPP Industry Chain

Over the past five years, both BOPP and its upstream/downstream products have faced supply-side disruptions, leading to reduced profitability. To cut production costs and expand benefits, BOPP enterprises and their upstream/downstream counterparts have accelerated vertical integration by extending their supply chains upward or downward. Among these: - Upstream polypropylene (PP) raw materials exhibit significant profit margin volatility, coupled with high investment and technological costs, resulting in few BOPP enterprises venturing into PP production. Meanwhile, the downstream adhesive tape master roll industry features low entry barriers. To secure sales volume, BOPP enterprises primarily integrate downstream master roll production lines. From the master roll industry's perspective, BOPP—as its upstream raw material—offers relatively stable profitability. Its production technology and costs are lower than those of butyl acrylate, granting new entrants a competitive edge. Consequently, master roll manufacturers frequently proactively add BOPP production lines.

Driven by the 15th Five-Year Plan, vertical integration will continue in the coming years. Most initiatives involve downstream producers adding BOPP lines. By 2025, tape manufacturers Yaliya and Friendship Group, along with pre-coated film producer Sichuan Xinkangyi, will all launch BOPP lines. Additionally, upstream PP producer Hebei Haiwei plans to add two new BOPP production lines. Moving forward, upstream player Hebei Haiwei and downstream players Yaliya, Friendship Group, and printing factory Shijiazhuang Haiyan will continue adding BOPP lines. BOPP producer Hubei Jiayue will extend downstream by launching coating lines. These moves will significantly enhance industry synergies, reduce costs, boost profits, and strengthen competitiveness. Driven by the 15th Five-Year Plan policies, the BOPP industry is poised for healthy development.

Over the past five years, oversupply pressures have driven sustained price declines and shrinking gross margins in the BOPP sector. To address this, the industry has implemented measures such as reducing production capacity utilization, delaying new line launches, advancing integration processes, and upgrading technologies—yielding initial results. The 15th Five-Year Plan introduces new requirements and recommendations for optimizing and upgrading traditional industries. Moving forward, BOPP manufacturers may develop strategies tailored to regional demands, intensify R&D efforts, diversify product portfolios, and enhance competitive advantages through integrated supply chain upgrades that reduce raw material and transportation costs. Additional policies are likely to be introduced, further driving traditional industry upgrades and fostering the healthy, sustainable development of the BOPP sector.

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