The COVID-19 is accelerating globally. What is the status of China’s foreign trade business of masks?

The global spread of covid-19 is accelerating, and masks are in short supply. After more than two months of difficult anti – epidemic, the domestic mask production capacity has been stimulated, the market supply is approaching normal.
China’s face masks are starting to be exported, and the huge demand has created a huge business opportunity. Two months ago, flights and shipments brought masks from different countries to China. Now it’s the other way around. It is this close link that is needed to address the rapid and widespread spread of the disease in today’s interconnected world.

Masks trade in the direction of the virus flow

“Now there is no shortage of masks, no one to ah? On March 4, a question popped up in a second-by-second stream of mask trading messages.
After a two-second pause, a line of sales and sales requests quickly brushed it off.
“Disposable medical, 2.6 pieces, 5W pieces”
“Take 100,000 forehead temperature guns, not industrial ones”…
After a while, this row of dense information, finally squeeze out a response to the sentence:
“It can be sold abroad. Take them abroad, 10 masks for $20.”

At the beginning of March, many manufacturers made export ideas, but did not do much. Many countries have very strict qualification requirements for mask import. Some factories inquired about the CE certification needed to export to the EU, which took several months and gave up. At the time, covid-19 was just over 10,000 confirmed in countries other than China. On March 2, the world health organization (who) said the COVID 19 outbreak was not yet a pandemic and that in many European and American countries, masks were not seen on the streets.

Only a week later, however, things changed dramatically. On 11 March, the world health organization declared covid-19 to have pandemic characteristics.

As of April 2, Beijing time, more than 920,000 cases have been confirmed globally, among which the United States, Italy, Spain, Iran, Germany and France are the most serious. Gaps in masks are growing, and on March 22, Italian media reported that the country’s health system was on the verge of collapse, with hospitals in some of the worst-hit areas severely lacking supplies.

Only U.S, the department of health and human services estimates that 3.5 billion masks will be used in the fight against novel coronavirus.

Meanwhile, the outbreak in China is on the mend. Since the beginning of march, the online and offline channels in China that have been in short supply for a long time began to gradually put on masks. This is a month since a large number of enterprises to expand capacity, increase production, the results of the production of masks. According to sky eye check data, in terms of business registration change information, in January 1 solstice between February, more than 4,000 enterprises in China added the business scope of “masks”, from March 1 to now, China has added the business scope of more than 5,000 enterprises including masks.
Lei limin, chairman of the China textile commerce association’s safety and health protection products committee, estimates that at the end of February, 180 million masks of all kinds were produced every day in the country, and the number is growing. The daily production capacity of a large market of masks in China alone may exceed 50 million.

As the world factory, China is continuously release productivity – it has complete mask industry supply chain, from polypropylene raw materials, to melt-blown fabric, to mask machine equipment, including raw materials, components, involves the chemical industry, textile, machinery, metallurgy, electron, etc., basic industry, during the period of domestic outbreak, masks were fully capacity expansion. As a part of globalization, it will play a role in global trade.

Masks are a business, and during the epidemic, they became a symbolic business. The way the virus spreads is the way it flows, and the speed of trade is racing to catch up.

The production line runs very fast, but it never delivers

Since the second week of March, foreign trade orders from abroad have surged, with orders for millions of orders pouring into factories with daily output of only a few hundred thousand. Waiting shippers crowd outside the factory gates, their phones ringing all day.

In ChangYuan, Henan province, which is known as the “capital of medical equipment,” the director of a mask factory said the factory was working 24 hours a day from February until now. “

“There are more than 70 medical equipment companies in ChangYuan, and they are probably exporting at the moment.” In the past, export orders accounted for only a small part of ChangYuan. Now, all the neighboring factories he saw are applying for export licenses.

His foreign trade orders, most of them from Italy, are lining up for delivery. “One million, two million, five million, eight million, ten million, twenty million, and fifty million. The largest list under discussion is for 300 million masks in the United States. “His factory can produce a million masks a day. Three million orders, can only find a few more factories to work together. He estimates that all the mask factories in the city together can produce between 50 and 70 million masks a day.

Since the outbreak in China, mask companies have been requisition by the government, but the control has been gradually lifted or lifted. North Korea and the United States is one of the top 10 brands of face masks in China. Now it can export, but faces a situation where capacity cannot keep up with demand.

“Our production capacity is now mainly linked to foreign orders introduced to the government.” North Korea and the United States in charge of procurement staff Ye Shi said. Every day countless phone calls are urging him to deliver the goods, some orders customers have already made money, can’t return, still owe millions of goods can’t be delivered.

There are roughly three types of demand received by North Korea and us. One is a large number of orders from abroad, by the relevant personnel of the domestic government to find the factory after the connection; Second, domestic enterprises want to purchase to make donations, such as Alibaba; Third, through the national labor insurance association to find foreign governments. The final recipients of these orders are foreign hospitals or public systems.

These orders are “can’t not take, must give it to complete.” But every single one of those would add up to billions. “We don’t sign orders now,” he says. “It’s basically a matter of getting as much as we can each day and giving each order a little bit.” “Said Ye Shi.

This time, he found it harder than in February during the severe domestic epidemic. “Before, with our capacity, we were able to meet the targets given to us during the government takeover of the factory. Our employees worked 15 hours a day. But in this situation, we have added temporary workers, and we cannot finish the 24-hour work. “

To expand the capacity, one depends on the number of raw materials (melt-spraying cloth, non-woven cloth, etc.), one depends on the number of equipment. But for now, the upstream supply chain in north Korea and the us has yet to respond to the sudden increase, and the factory will not deliver the new mask machines until April. But now, all customers without exception are demanding delivery by the end of march or early April.

At present, a major factor restricting mask productivity is still melt-spraying cloth. Although petrochina, sinopec has increased the production of melt-spraying cloth raw materials, enterprises are also in production of new melt-spraying cloth production line, but for these continue to expand the production of masks factory, melt-spraying cloth is still in short supply. “Yanjiao petrochemical is now producing 50 tons a day. Do you think that 50 tons can cover the production of several mask factories? The minimum demand for a mask factory is five tons.” Mask trader liu Yang every day to help the factory to find melt-spraying cloth, only a little at a time, “the manufacturers can only provide you with 5 to 10 tons of these, these in a day or two to use up.”

XianTao in Hubei province, China’s largest producer of disposable masks, is almost back to work. A midsize factory that produces 500, 000 masks a day says it has so far received 10 million orders, with orders through the end of April. As far as he knows, all the face mask factories in XianTao county are now doing outside orders, “as long as can start, are very full, you can squeeze into it, unless it is a small workshop. Large factories have basically received foreign orders, now the large orders are foreign trade orders, domestic orders are very small.

Difficult qualification, customs waiting for the release of goods

For a large number of new production of domestic mask factory, to export smoothly, the solution of mask certification is the most important thing.

Each country has its own mask inspection standards and all tests have to be redone. Domestic manufacturers will make masks according to GB standard, while the EU will make masks according to EN standard. For example, the EU standard for personal protective masks is EN149. According to the standard, the masks are divided into FFP1 / FFP2 / FFP3. Samples should be sent to Europe for respiratory resistance testing. From preparing the materials to sending the samples to Europe for testing, if there is a problem, the manufacturer will readjust. After going through this process, 2-3 months have passed.

Of course, the validity of these new certificates has raised doubts. For example, the European FFP2 level certificate (which requires the filtration efficiency of both oily and non-oily particles ≥ 94%) is currently on the market. “to be honest, according to the standard, FFP2 masks must be produced with FFP filtration materials to meet the standards. But there is not much that can be done with FFP in the country.” We examined said.

Liu Yang had a friend who exported a batch of masks to foreign countries in early march. The products were all returned because of the suspicion of the authenticity of the certificates.

Recently, the United States and Europe have urgently relaxed the requirements for access to anti-epidemic supplies such as masks. For example, the European Union stipulates that member states can centrally purchase anti-epidemic products without the CE mark to be used by medical staff during the epidemic period and not circulate on the market. Companies like north Korea and the United States, whose orders focus on centralized procurement by the government and delivery to hospitals, cannot print the CE mark on masks, but directly produce and deliver them in accordance with the national standards of medical protection KN95, civil KN95 and KN90.

Goods imported in the form of donations, or purchased by the government itself, are often subject to looser standards. The 100,000 surgical masks that Liu contacted were shipped to Iran without the COI certification needed to import them, but with the help of trade promotion.

First for the hospital, the epidemic area of ordinary people, still difficult to buy masks

Many traders camped out for days at several factories, knocking on the door for goods. Every day, as soon as the gate of the mask factory opens, the production capacity is almost immediately sold out.

Out of stock, pay full payment after the start of the list, whose money first to calculate who. Some American customers have just transferred us dollars to the account of the Chinese trading company, and the us dollars will take three days to arrive. Before the money is transferred from the trading company to the factory account, the appointed capacity is completely exhausted.

There are a lot of people who smell business opportunities, but only a few who really catch them. Masks have become the best and most difficult to do business this year, some people get rich overnight, some people were cheated naked, until now still on the road of hard rights. But even so, players large and small continued to enter the game.

The mask machine is now known in the industry as the “printing machine”, put on the original roll, start the machine, the mask at a minute of hundreds of pieces of speed to fly out, like money flying.

Many affected countries are coordinating the priority supply of local protective materials to medical and public systems, and the inventory and capacity of domestic mask manufacturers have been requisitioned.

One consequence is that offline retailers are out of stock. Even if foreign traders import masks from China, it is difficult to carry out offline retail, especially in EU countries. “They dare not go through formal channels. The main problem is the risk, whether they import the certificate of these masks can really stand the examination, whether the price is reasonable, it is easy to go wrong in the open channel. No one will be able to bear the responsibility then.” Yu Jianguo said.

The same is true for online stores. Many cross-border e-commerce platforms have banned the sale of masks. In early march, ebay issued a notice saying that in order to eliminate chaos, the platform was removing existing mask products. In mid-march, amazon began to announce that it would no longer accept applications for selling mask products. By March 23, however, many businesses found that mask category audits were quietly resuming, but with strict qualification checks.

“Because the outbreak started earlier in China, overseas Chinese were given early warning and stocks of masks were plentiful.” As early as the end of January, during the outbreak in China, we went to the supermarket to stock up on masks, and those who were able to make donations and buy out the stock of many local factories. Our relatives back home mailed them to us very early [before the customs ban].” “Said a Chinese resident of the UK.

Based on what happened in the country in February, people in affected areas may not be able to buy masks until hospitals have solved the shortage. So the mask factory needs at least two weeks of production cycle, and at least a week of clearance and transportation time.

ShopShipShake works directly with some mask factories to ensure the supply of masks purchased in compliance with the certification. Hope to work with South Africans to combat covid-19 here.