Industry Insights | The Chinese offset printing plate market is growing against the odds, gradually occupying a share of the European offset printing plate import market

Print media refers to the physical carrier used in the printing process to record and transmit graphic and text information, and is an important type of printing consumable.

The upstream of the printing plate industry includes raw material suppliers, which include chemical raw materials such as aluminum coils, acids and alkalis, liner paper, packaging materials, photosensitive materials, etc. Among them, aluminum coils are the main raw material for printing plates. The midstream consists of printing plate manufacturers. According to different printing processes, printing plates are divided into offset printing plates and flexographic plates. Offset printing plates are further divided into CTP plates (Computer-To-Plate) and PS plates (Polystyrene plates) according to different imaging technologies. The main sales models of printing plate manufacturers include distribution model and direct sales model; the downstream application fields mainly include the printing industry, including printed products such as books, periodicals, newspapers, commercial advertisements, labels, and packaging.

In the entire industrial chain, the development and operational conditions of upstream and downstream industries are highly correlated with those of the industry itself. In particular, price fluctuations in upstream aluminum coils directly affect the production and cost of printing plates.Thanks to industrialization and standardized production, sufficient raw material supply, and a complete supply chain system, the upstream industry is basically in a state of perfect competition with prices following market trends. The downstream demand side is affected by various factors such as economic development, industry prosperity, and residents' disposable income. China's leading printing plate manufacturers also focus on overseas markets such as Europe and Southeast Asia. In addition to being influenced by the aforementioned factors, the demand for printing plates in overseas markets is also affected by trade policies.

From 2020 to 2022, in terms of export value of offset printing materials, China's export scale of printing materials to Europe increased from $114,600,000 to $239,803,000, with an annual compound growth rate of approximately 44.7%. For a long time, some well-known overseas manufacturers of printing materials have monopolistic advantages in terms of technology, brand, and market in some key raw materials and high-end products.

As leading Chinese printing plate manufacturers continue to strengthen their R&D investment, they have made breakthrough progress in areas such as photosensitive adhesive and flexible plate products.It has broken the long-standing technological monopoly of foreign enterprises, laid a solid foundation for achieving domestic substitution, and promoted the high-quality development of China's printing plate industry and the printing industry. In the European market, the technological progress of Chinese printing plate enterprises is conducive to breaking the dominant position of foreign monopolistic enterprises, reinvigorating the printing plate market, and facilitating the healthy development of overseas printing plate markets and the printing industry.

In terms of import value of offset printing materials, China, Japan, and the United States are the top three importing countries in the European printing materials market. In 2022, the proportion of imports from China, Japan, and the United States in the European printing materials market was 62.9%, 17.0%, and 13.4% respectively.

China is the largest importer of printing materials in Europe, accounting for more than 50% of imports from China for three consecutive years. In 2021, as the pandemic gradually recovered, the demand for printing materials in Europe rapidly rebounded. At the same time, the export scale of leading enterprises in China's printing materials industry increased significantly, resulting in a substantial increase in the proportion of imports from China to the European printing materials market to 70.1% in 2021. With the continuous development of China's printing materials technology and the continuous improvement of product quality, it is expected that the proportion of imports from China to the European printing materials market will further increase in the future.

In recent years, the Chinese government has issued a series of policies to promote the development of the printing materials market. For example, in October 2019, the National Development and Reform Commission issued the 'Industrial Structure Adjustment Guidance Catalog (2019 Edition)', encouraging the development and application of high-tech, digital, intelligent printing technologies and high-definition plate-making systems; in December 2021, the National Press and Publication Administration published the 'Special Plan for the Development of the Printing Industry during the 14th Five-Year Plan Period', emphasizing the important position of printing materials in the printing industry and encouraging the advancement of research and development of high-speed exempt processing CTP plates, digital flexible plates, and other printing materials.

In Europe, in March 2021, the European Commission released the 'New Industrial Strategy for Europe', which regards industry as 'the core of future progress and prosperity in Europe', emphasizing the role of industry in European economic development. The printing industry, including the printing plate industry, as one of the important industrial systems, will be further developed. In December 2021, the European Publishers Federation (FEP), the European International Bookbinders and Related Industries Federation (INTERGRAF), and the European International Publishers' Federation (EIBF), jointly issued a statement highlighting the importance of physical books to European culture, education, and economy. This will drive demand growth in the printing industry and promote the development of the printing plate industry.

Global macroeconomics has maintained stable development in recent years, stimulating an increase in global business activities such as the establishment of new companies and the launch of new products. This will drive the growth of printing demand, including commercial brochures, product packaging, posters, etc. At the same time, China's per capita disposable income reached 36,883 yuan in 2022, a year-on-year increase of 5.0%, and the per capita disposable income in European countries has also increased.

As per capita disposable income increases in various countries, consumers' purchasing power strengthens, which drives the demand for various products and services, including printed materials such as books and magazines. Secondly, people's consumption behavior also tends to favor high-end product packaging due to increased income, which increases the demand for high-end packaging printing. With the increase in demand for printed materials, as one of the important consumables in the printing industry, the demand for printing plates will also rise, thereby promoting the development of the printing plate industry.

With the rapid development of the e-commerce industry, especially against the backdrop of the global pandemic, consumers are increasingly relying on online shopping to meet their needs. According to the National Bureau of Statistics, in 2022, China's online retail sales reached 13.8 trillion yuan, a year-on-year increase of 4.0%; according to the Statista database, European e-commerce revenue reached 596.04 billion US dollars in 2022, and it is expected to increase significantly by 22.5% in 2023. Among them, Spanish e-commerce revenue was about 41.16 billion US dollars in 2022, and it is expected to increase by 13.7% in 2023.Benefiting from the rapid development of e-commerce, the logistics industry has developed rapidly, thereby driving the development of the packaging and printing sector. The continuous expansion of packaging and printing demand has increased the demand for printing materials, which in turn has promoted the development of the printing material industry.

For a long time in the past, some well-known overseas printing plate manufacturers had monopolistic advantages in terms of technology, brand, and market in some key raw materials and high-end products. With the continuous strengthening of R&D investment by China's leading printing plate manufacturers, breakthrough progress has been made in areas such as photosensitive adhesive and flexible plate products, breaking the long-standing technological monopoly of foreign enterprises. This has laid a solid foundation for achieving domestic substitution and promoting the high-quality development of China's printing plate industry and the entire printing sector.

In the European and Spanish markets, the technological progress of Chinese printing plate enterprises is conducive to breaking the dominance of foreign monopolistic companies, reinvigorating the printing plate market, and promoting the healthy development of overseas printing plate markets and the printing industry.

The printing plate industry is a typical technology-driven innovation industry globally. In China, due to the need for large-scale production, automation and digitization offer advantages in production efficiency and cost control, which will gradually increase their application in the printing plate production industry. By continuously introducing digital and automated processes and equipment such as fully automated production lines or robots, printing plates are automatically cut and assembled to improve production efficiency, reduce costs, minimize human errors, and enhance the quality and consistency of printing plates. In Europe and Spain, due to high labor costs, the application of digitization and automation will be an inevitable trend in their printing plate industry. Through digitization and automation, unit labor productivity is increased, achieving cost reduction and efficiency improvement.

In traditional printing materials, the use of ink and solvents can cause certain environmental pollution. In recent years, governments in China, Europe, and Spain have placed increasing emphasis on environmental protection policies. For example, in June 2019, the Ministry of Ecology and Environment issued the 'Comprehensive Management Plan for Volatile Organic Compounds in Key Industries', listing packaging printing as one of the key industries; in December 2019, the European Commission released the 'European Green Deal', aiming to prevent non-environmentally friendly products from entering the EU market.

Meanwhile, consumers around the world are gradually increasing their awareness of environmental protection. They tend to choose products packaged with environmentally friendly materials, which is not only beneficial to health but also contributes to environmental protection. Therefore, various printing plate production enterprises are gradually transitioning towards environmentally friendly printing plate products, such as investing in the production of environmentally friendly products like solventless offset plates and flexible plates. The environmental friendliness of flexible plates will also become one of the development trends for printing plates in the future due to their material properties.

In the post-pandemic period, the globalization process has entered an adjustment phase, presenting new characteristics of regional cooperation. These new features can promote deeper cooperation among printing plate enterprises across countries. Among them, printing plate enterprises can seek high-quality and low-cost raw material suppliers globally, thereby reducing costs and improving production efficiency. At the same time, the global supply chain can disperse supply risks, reducing the dependence of printing plate production enterprises on a particular market or supplier and enhancing the stability of enterprises in the face of raw material price fluctuations.

With the continuous development of business and the accumulation of certain capital reserves, it is a possible industry development trend to integrate upstream and downstream of the industrial chain in order to cope with the risk of raw material price fluctuations. In the printing plate industry, raw materials such as aluminum coils and photosensitive materials account for most of the production costs. Through industrial chain integration, if enterprises can control the supply of raw materials, they will have a greater advantage in cost control. In addition, by integrating the industrial chain, enterprises can combine printing plate production with printing services, so that they can respond more quickly when market demand changes. For example, if there is a demand for new environmentally friendly printing plates in the market, integrated enterprises can conduct research and development and production more quickly to seize market opportunities.