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In March, China exported almost 4 billion masks, 37.5 million gowns and isolation suits, 16,000 ventilators and almost 4 million coronavirus testing kits, customs officials revealed earlier in April. Photo: Xinhua

Coronavirus: China’s mask, gown markets in chaos as shortages of vital raw materials sow more mayhem

  • Prices for surgical gowns and masks have soared, sources said, due to shortages in vital materials such as melt-blown non-woven fabric
  • Industry sources also point to surge in poor quality equipment, lacking in the sorts of raw materials vital to ensure masks are effective

Vital raw material shortages are causing chaos in China’s already manic medical equipment market, sending prices of masks and gowns crucial to containing the coronavirus pandemic soaring.

Conversations with more than a dozen people manufacturing or trading medical equipment in China, most of which took place under conditions of anonymity given the sensitivity of the matter, confirmed dwindling access to the melt-blown non-woven fabric and polypropylene that are essential to making surgical standard masks and gowns, nitrile for gloves and parts for ventilators and thermometers.

One person was asked to source surgical gowns for a Western government’s health care system, but had to cancel the deal after the price per gown rose from 80 US cents to more than US$3 in the space of a few weeks.

“Getting a disposable gown in China is now nigh on impossible,” the person said. “The same material is used in mask production and because they are cheaper and easier to make, the factories are just making them instead.”

If you find a supplier, you better have the cash to pay upfront and grab it, as it’s cash only
Factory representative
On one hand, the shortage is understandable. In March, China exported almost 4 billion masks, 37.5 million gowns and isolation suits, 16,000 ventilators and almost 4 million coronavirus testing kits, customs officials revealed earlier in April, with the manufacturing overdrive burning through stockpiles of chemicals and petrochemicals needed to make the fabrics.

But some believe the shortage is due in part to Beijing’s efforts to take some of steam out of a market that was overheating and leading to a series of public relations disasters overseas.

Countries including Spain, Britain and the Netherlands have reported Chinese masks and testing kits not being fit for purpose, while the market is flush with con-artists and fly-by-night scalpers brandishing fake certificates and export licenses.

Only approved manufacturers have guaranteed access to the certified melt-blown fabric made by well-known companies such as Sinopec, China’s state-owned oil company, while most private manufacturers are left to find their own sources.

On February 24, Sinopec set-up 10 melt-blown non-woven fabric production lines, with a further two added on March 6. At that point, the company was making 18 tonnes a day, to be made into 3.6 million N95 respirators or 18 million surgical masks by mid-April.
David Sun, a trader of masks and personal protection equipment (PPE) out of the Chinese commercial hub of Yiwu said that “the price for melt-blown fabric before the pandemic was about 20,000 yuan (US$2,825) per tonne. Now, if you have a government referral letter, it costs less than 200,000 yuan per tonne (US$28,300), but if you do not, the market price could be 500,000 yuan (US$70,700) per tonne.”

Another trader, who asked not to be identified, said he had been quoted a price of 600,000 yuan for a tonne of melt-blown fabric – an increase of 2,900 per cent from the previous price, with those unable to gain access to official stocks forced to pay inflated prices from independent producers and sellers.

Others point to scalpers parking trucks outside factories producing melt-blown fabric and loading up on the raw material with the precise aim of price gouging.

The owner of a mask factory in Fujian, who preferred to use only his family name of Liu, said he had access to a trusted supplier but was now seeing prices fluctuate as shortages emerge, due not only to excessive demand but also to local supplier “hoarding”.

“Some people are starting to look overseas in places such as Ukraine, Russia … many have no choice but to buy more expensive raw materials if they want to keep up production,” Liu said. “To keep going further, manufacturers would have to look beyond domestic suppliers, for sure, to have more than one channel.”

Prices of raw materials have been fluctuating daily, but because manufacturers were making so many masks, Liu said he was able to absorb the higher costs of raw materials without affecting the prices of masks, at least for now.

An independent producer of melt-blown fabric in the industrial area of Cixi near Ningbo in Zhejiang province spoke of price fluctuations and falling standards in the melt-blown market, with the scarcity of the fabric leading to a flood of substandard products hitting the market.

The quality was atrocious. They were priced well below the market rate
Sourcing specialist

“This fabric is in top demand, very scarce. There is a different price for it everyday,” the factory representative said, speaking on condition of anonymity. “It’s also very difficult to buy genuine fabric. If you find a supplier, you better have the cash to pay upfront and grab it, as it’s cash only.”

A sourcing specialist in Shanghai said they had tested multiple samples from shipments of masks bound for Britain and other European countries purportedly containing a layer of melt-blown fabric required to make masks safe for frontline health care workers.

“The quality was atrocious,” he said. “They were priced well below the market rate, which aroused our suspicion, so we tested them in our lab and found that they did not have the layer of melt-blown fabric required to keep the droplets out. This explains to me why so many people are getting sick.”

Authorities in China and abroad have been cracking down on fly-by night operators in the market, introducing tough new export laws that require goods to be inspected by Chinese customs before export to make sure they meet domestic and international standards.

But in such an unwieldy market, with insatiable demand from countries fighting to contain Covid-19 outbreaks, and tens of thousands new entrants to China’s PPE market, it is proving difficult to keep a lid on it.

In one example, customs officials in Cincinnati, Ohio, seized a shipment of 2,000 counterfeit 3M masks that had been shipped from China.

Foreign governments have therefore taken to bypassing private sector intermediaries in a bid to mitigate the risk of buying poor quality, overpriced medical equipment. It is believed the Chinese government has a sizeable stockpile of PPE available for such state-to-state deals.

In a call with his Chinese counterpart Wang Yi this week, French foreign minister Jean-Yves Le Drian thanked China for assisting in the urgent procurement of medical resources, while the British government took a shipment of medical gowns on Thursday, products which independent buyers this week described as “gold dust”.

Additional reporting by Cissy Zhou and Sidney Leng