Modified EVA (Lower): Annual Consumption Growth Rate of 5.8% During the 15th Five-Year Plan, Future Landscape of Three Major Application Areas

This series of articles focuses onModified EVA Technology, Applications, and Market Situation, the previous articleThe main focus is on the technological trends and commercial prospects of modified EVA in three major sectors: photovoltaics, footwear, and cables. The next section will continue to explore the competitive landscape, business models, and future trends of modified EVA in these three application fields in China.

The differentiation in performance requirements for EVA modified materials in terminal products leads to varied competition among manufacturers in different application fields, resulting in significant differences in business models and the degree of industry integration.

Due to the significant impact of modified EVA formulations on the performance of downstream application products, downstream manufacturing enterprises often independently develop EVA modification formulations and technologies. They procure or import EVA particles to modify EVA and continuously produce downstream photovoltaic film products. The EVA modification process is just one part of their downstream product production process. Therefore, in the field of photovoltaic films, the manufacturers of modified EVA and the downstream users are highly overlapping, and there are basically no independent manufacturers of modified EVA products.The degree of vertical integration in the modified EVA industry for photovoltaic encapsulants is very high.The main companies in the photovoltaic film industry include Foster, Swick, Haiyou New Materials, Saiwu Technology, and Baijia Niandai. The industry shows a "one strong leader and many strong players" pattern. In the future, leading companies in the industry still have expansion plans.The photovoltaic adhesive film industry is expected to see its market further concentrate among leading players, with the trend of the strong becoming stronger becoming increasingly evident, making it more difficult for new entrants.

China is a major manufacturer of sports shoes and shoe materials in the world, with a highly developed sports shoe material industry. The traditional chemical foaming method for producing EVA foam shoe materials has a low technological entry barrier, resulting in a large number of manufacturers and a highly fragmented competitive landscape in the industry. Major companies in the foam shoe material sector include Haili Hailisi, Taiya Group, Jiangsu Damoniu, Quanwei Technology, Fujian Maotai, and Fujian Jiayi. Other main manufacturers of foam materials include Dongguan Zhaoyang Xingye, Anhui Jiabin New Materials, Suzhou Siding Cushion, Wenzhou Fengrun New Materials, and Changzhou Yuncheng Rubber & Plastics.Large footwear material manufacturers typically produce modified EVA materials for their own use and continuously produce downstream products such as EVA shoe midsoles. Additionally, some small and medium-sized enterprises only produce and sell modified EVA materials externally. The degree of vertical integration in the industry is relatively high.At the same time, the shoe material industry often adopts a horizontal integration development strategy, producing a variety of different types of shoe materials (such as TPU, TPEE foam, etc.) to meet the diverse needs of customers. Currently, large EVA foaming shoe material production enterprises have advanced foaming technology, especially those that master supercritical foaming technology, which have more and closer collaboration opportunities with downstream brand companies. On the other hand, small and medium-sized enterprises have relatively weak R&D capabilities and mostly use traditional chemical foaming technology. It is expected that in the future, such outdated production capacities will be gradually eliminated, leading to an increase in industry concentration. Enterprises with leading technologies are expected to further expand their production capacity and increase their market share.

Overall, the EVA foam shoe material industry in China is relatively mature. In the future, downstream customer resources, leading technology, and cost control will continue to be the core of industry competition.

From the overall perspective of the polymer materials industry for cables, the domestic market structure is well-defined, with sufficient competition and low industry concentration. For a long time, there have been numerous small enterprises. The market is dominated by multinational companies with leading technology and scale (such as Dow Chemical, Borealis, PolyOne Corporation) and domestic companies with serialized, large-scale products and certain technical reserves (such as Taihu YuanDa, Wanma Co., Ltd., CGN Nuclear Technology Development Co., Ltd.). On the other hand, medium and small-sized ordinary cable material manufacturers with relatively singular products are mainly concentrated in the low-end product market, mostly relying on low-price strategies to gain some market share, but their ability for sustainable development is poor.

The wire and cable materials industry has high product formulation and technical barriers. Additionally, products must undergo various strict tests and certifications from the power department, which have a lengthy cycle, increasing the difficulty of industry entry and to some extent hindering the entry of potential competitors, thereby amplifying the technological advantages of leading enterprises.

In the field of EVA modified materials for wires and cables, Chinese companies have basically achieved self-sufficiency. Large enterprises have realized the large-scale production of EVA-based low-smoke halogen-free flame retardant materials, shielding materials, and oxygen barrier materials. There are numerous small and medium-sized enterprises, the industry has sufficient production capacity, and competition for general-grade products is becoming increasingly fierce.

Overall, the downstream integration level of the EVA modified material industry in the wire and cable sector is relatively low.Representative companies producing EVA modified materials for wire and cable include Wanma Polymer, Taihu Yuanda, and Zhongchao New Materials. Most manufacturing enterprises typically purchase EVA resin, modification additives, and other materials to produce modified cable materials, which are then sold to downstream wire and cable manufacturers. However, there are also some large enterprises that extend production to wire and cable products, such as Wanma Polymer, Zhongchao New Materials, and Shanghai Kaibo, whose parent companies all produce wire and cable, thereby achieving vertical integration. In the wire and cable industry chain, downstream wire and cable manufacturers have significant bargaining power. Therefore, these companies have certain advantages in vertical integration, but there may also be issues related to transfer pricing within the group that affect product pricing and market competition.

Future industry competition will mainly focus on the research and development of EVA modified material formulations for high-performance and specialized application scenarios in wire and cable, as well as differentiated competition, market marketing, and cost control.

China is a major producer of modified plastics, and the domestic supply and demand for modified EVA are basically balanced. In recent years, the demand has been strongly driven by the growth of the photovoltaic film industry.

Modified EVA material production enterprises primarily serve downstream end-product manufacturers, with the EVA modification process being a preliminary step in end-product production. Taking the photovoltaic film industry as an example, photovoltaic film manufacturers modify EVA resin into modified masterbatches according to modification formulas based on the performance requirements of end products. This is followed by processes such as "premixing, melt extrusion, film casting, cooling, embossing, slitting, rewinding, inspection, and packaging" to produce finished products for sale. Therefore, modified EVA products in China are mainly for self-use, with production enterprises adjusting their modified EVA production plans based on downstream orders. Domestic supply and demand are basically balanced, import and export volumes are negligible, and production volume is essentially equivalent to consumption volume.

In 2024, the total consumption of modified EVA in China is approximately 3.63 million tons (calculated as pure EVA resin, the same below), with a CAGR of about 20% for consumption from 2021 to 2024.In recent years, the rapid growth in demand for modified EVA has been mainly driven by the photovoltaic industry's demand for photovoltaic encapsulant films.

Due to the introduction of vinyl acetate monomer in the molecular chain, EVA has a low crystallinity and can maintain strong flexibility even at a temperature of minus 50°C. Additionally, EVA has good compatibility with fillers, making it easy to color and process into shapes. It also possesses good flexibility, impact resistance, environmental stress resistance, heat sealability, aging resistance, and ozone resistance. Therefore, it is widely used in fields such as photovoltaic adhesive films, foam shoe materials, wires and cables, hot melt adhesives, coating materials, and agricultural films.

Photovoltaic adhesive film field.In recent years, China's photovoltaic module production has experienced explosive growth, rising from 180 GW in 2021 to 588 GW in 2024, with an average annual growth rate of approximately 48.4%. EVA, due to its good transparency, weather resistance, thermal stability, and electrochemical properties, as well as relatively low production costs, remains the main substrate for photovoltaic encapsulation materials. The rapid growth in the photovoltaic sector has effectively driven the demand for modified EVA. In 2024, the consumption of modified EVA for photovoltaic encapsulation materials in China is expected to reach approximately 1.65 million tons.

Foam materials are the second largest application field of modified EVA in China.The primary use is for manufacturing midsoles of sports shoes, and it can also be used for making automotive interiors, sports equipment, packaging materials for precision instruments, etc. EVA foam material, as a shoe midsole, has good cushioning and rebound performance, is waterproof, non-slip, and wear-resistant, and is relatively lightweight. Moreover, the production cost of EVA foam material is low, making it the main material for sports shoe midsoles. EVA foam material accounts for about 75% of applications in the footwear sector. In recent years, as consumer preference for lightweight and comfortable footwear has increased, the purchase ratio of sports shoes has risen, leading to steady growth in demand for foamed EVA. In 2024, the consumption of EVA in the foam material field is expected to be approximately 630,000 tons.

The field of wires and cables.Modified EVA is mainly used in the wire and cable industry for low-smoke, halogen-free flame-retardant cable materials and semiconductive shielding materials for medium and high-voltage power cables. The demand for modified EVA in the low-smoke, halogen-free flame-retardant cable material sector is the highest, accounting for over 65% of the total consumption of modified EVA in the wire and cable field in 2024. In recent years, the demand for modified EVA in the wire and cable sector has shown steady growth, with the consumption of EVA in this field expected to be around 400,000 tons in 2024.

Due to the special nature of the modified EVA industry chain, modified EVA products are primarily used for internal production with very low import and export volumes. In terms of imports, the focus is on importing pure EVA resin rather than modified EVA. As for exports, China's modified EVA material exports are less than a thousand tons, having little impact on the domestic market, with exports mainly consisting of downstream end products. Overall, due to the influence of international division of labor and the characteristics of industry chain integration, it is expected that for a considerable period in the future, the import and export volumes of modified EVA materials will remain low, with imports mainly being primary EVA resin and exports continuing to concentrate on downstream end products.

On the supply side,China's modified EVA production capacity is sufficient, and overall the industry has a high degree of downstream integration. Most companies produce for their own use and adjust the production plans for upstream modified EVA based on order situations. It is expected that the domestic supply and demand for EVA will be basically balanced in the future.

ConsumptionThe consumption of modified EVA is expected to reach 4.82 million tons by 2029, with an average annual consumption growth rate of approximately 5.8% from 2024 to 2029. As the "leader" in EVA consumption, the photovoltaic industry will continue to grow at a higher rate compared to sectors such as foaming, wires and cables, and hot melt adhesives, while the growth in consumption in the downstream agricultural film industry may slow down.

As the installed capacity of photovoltaic power generation equipment continues to increase, the demand for EVA film, an important component of photovoltaic cells, will continue to grow rapidly, though at a slower pace. The average annual growth rate is expected to be 7.0% from 2024 to 2029. In the area of foamed shoe materials, the proportion of EVA in rubber-plastic blends has increased, and the demand for modified EVA is maintaining stable growth, with an expected average annual growth rate of approximately 4.0% from 2024 to 2029. In the wire and cable sector, low-smoke, halogen-free flame-retardant cable substrates will continue to primarily use EVA in the short term. For high-voltage power cable semiconductive shielding materials, EVA retains a cost advantage over EBA. The demand growth rate for modified EVA in the wire and cable sector is expected to be about 5.5% from 2024 to 2029. With the rapid development of industries such as new energy, electronics, and automotive, the application fields of hot melt adhesives will further expand, with an expected growth rate of about 5.5% from 2024 to 2029 for modified EVA consumption. In other areas, with further development of applications such as EVA coating materials and high-end EVA agricultural films, the consumption of modified EVA in other fields is expected to grow at an average annual rate of about 5.0%.

In the photovoltaic encapsulant film sector, the producers of modified EVA material and the downstream users significantly overlap. The downward integration of the modified EVA industry is highly advanced, and the market in the photovoltaic encapsulant film industry is expected to further concentrate towards the leading companies. The trend of the strong getting stronger is becoming increasingly evident, making it more difficult for new entrants.The foam shoe material industry has matured, with manufacturers either producing their own or purchasing modified EVA materials, creating a dual business model. The modified EVA industry has a relatively high degree of vertical integration, and in the future, downstream customer resources, leading technology, and cost control will remain the core of competition in the industry. In contrast, the modified EVA material industry for wire and cable has a lower degree of vertical integration, with ample industry capacity and increasingly fierce competition for general-grade products. Downstream wire and cable manufacturers have significant bargaining power in the wire and cable supply chain, so wire and cable companies that extend upstream to produce modified EVA materials hold certain integrated advantages in the wire and cable modified EVA material industry. It is recommended that manufacturers of modified EVA materials for wire and cable focus on the research and development of formulations for high-performance and specialized application scenarios, differentiation in competition, marketing, and cost control.