'What About Korea'... China Strengthens Management of Mask Raw Materials

On the 4th, residents are lining up in front of a pharmacy in Yongsan-gu, Seoul, to purchase masks as the government is considering a plan to sell masks exclusively at pharmacies. Photo by Jinhyung Kang aymsdream@

[Asia Economy Beijing=Special Correspondent Park Sun-mi] As China strengthens the management of quarantine supplies to prevent the spread of the novel coronavirus infection (COVID-19), South Korea, which is also facing tight mask supply, has gone on high alert. Although South Korea's imports of Chinese mask raw materials surged in January this year, the Chinese government is tightening control over quarantine supplies, and the price of mask raw materials within China is also soaring, putting South Korea in an even more difficult situation.

According to data provided by the Korea International Trade Association's Beijing branch on the 4th, South Korea's imports of mask raw material MB filters (melt-blown nonwoven fabric) from China in January amounted to $2.304 million, nearly double the $1.243 million recorded in January 2019. Although imports of mask raw materials typically increase in winter, considering that the level was around 40-50% from October to December last year, this represents a significant increase.

This figure was extracted using the customs item code that generally applies to nonwoven fabrics used by mask raw material importers, specifically those with a weight per square meter exceeding 25 grams but not exceeding 70 grams. The import volume of general Chinese nonwoven fabrics also increased by more than 9% to $24.98 million in January this year, compared to $22.8 million in January 2019. The growth rate of Chinese nonwoven fabric imports had mostly been negative last year.

January was the period when COVID-19 began spreading in China, but due to the Spring Festival (Chinese New Year) holidays and regional lockdown measures to prevent the virus spread, business and factory activities were not smooth. As a result, orders for masks from China surged in South Korea, and many people were willing to pay premiums to buy Korean masks and bring them to China.

However, recent measures by the Chinese government to strengthen the management of quarantine supplies have made it difficult for South Korea to purchase Chinese mask raw materials. An industry insider explained, "Recently, the Chinese government issued a notice to strengthen the management of quarantine supplies, which has put a brake on the export of mask raw materials outside China. There is fierce competition among different provinces and cities within China to secure supplies, and most regions are consuming the materials domestically."

Chinese President Xi Jinping held the Politburo Standing Committee meeting, the highest leadership meeting in China, for the first time regarding the COVID-19 situation on January 25 during the Spring Festival holiday. He urged comprehensive countermeasures against COVID-19 and ordered the mobilization of all related medicines and supplies. Subsequently, on February 1, Premier Li Keqiang inspected the medical supplies procurement system and ordered that, following President Xi's instructions, utmost efforts be made in the production, procurement, and distribution of medical supplies, prioritizing key areas.

At that time, due to the COVID-19 spread, business and factory operations in China had almost come to a halt, leading to rampant hoarding of quarantine supplies including masks and widespread complaints about shortages. In response, Chinese authorities have been operating a daily quarantine supplies inspection system to manage the production status of quarantine supplies by companies.

The rapidly rising price of mask raw materials within China is also a negative factor for South Korea, which desperately needs to import these materials. According to the Chinese media Xinjingbao on the day, the price of MB filters, which used to be around 20,000 yuan per ton, has now reached a market price of 200,000 to 300,000 yuan. Many mask production factories in China are unable to produce because, despite having raw material procurement contracts, they cannot receive the goods due to shortages.

In the Chinese financial market, medical mask futures options have even appeared to minimize losses for mask manufacturers caused by soaring raw material prices. The sharp rise in mask raw material prices in China is largely due to the government's directive to focus all efforts on producing quarantine supplies, which has led not only existing mask manufacturers but also major companies from various industries, including automobile manufacturers like BYD, to enter mask production.

As a result, as of January 29, China's nationwide daily production capacity and output of general masks, medical masks, and medical N95 masks reached 110 million and 116 million units respectively, both surpassing 100 million units. Compared to the situation on February 1, these figures represent increases of 5.2 times and 12 times respectively.

Wu Xueming, Deputy Director of the China Studies Institute at the Shanghai Academy of Social Sciences, said, "China is well aware of its role in the global supply chain for quarantine supplies and will fulfill its responsibilities and obligations to neighboring countries, provided that domestic demand is met."

This content was produced with the assistance of AI translation services.