Northeast Securities Co.,Ltd. released a research report stating that the metal packaging industry entered another capacity expansion phase from 2022 to 2024, with multiple companies commissioning new production lines, intensifying market competition. By 2024, the average price of two-piece cans dropped to RMB 0.47 per can. However, leading players are increasingly resisting internal competition, which may halt the price decline and drive profitability recovery across the sector. Aluminum, the highest-cost component in two-piece can production, significantly impacts profit margins due to price volatility. Key insights include:
**Metal packaging primarily serves F&B, with divergent competition between two-piece and three-piece cans** In 2023, China’s metal packaging container industry generated revenues of RMB 150.56 billion, accounting for 13.05% of the broader packaging sector. Over 70% of demand comes from food and beverages, with cans—categorized as two-piece and three-piece—being the dominant product. Three-piece cans benefit from strong downstream client loyalty and stable competition, while two-piece cans face frequent supply-demand shifts, leading to historical price volatility.
**Cyclical price trends in two-piece cans** Taking Baosteel Packaging as an example, two-piece can pricing evolved in three phases: 1. **Capacity surge (2012–2016)**: Post-2012, slowing growth in beer and soft drink production dashed optimistic expectations, triggering oversupply. Prices fell from RMB 0.52 to RMB 0.37 per can. 2. **Industry consolidation (2016–2022)**: Price declines squeezed margins, prompting mergers. Smaller players exited, and foreign firms like Ball and Pacific Can sold China operations. Rising can-usage rates supported demand, lifting prices to RMB 0.54 per can. 3. **Second expansion wave (2022–2024)**: Renewed capacity additions intensified competition, pushing 2024 prices down to RMB 0.47 per can.
**Beer and soft drink slowdown shifts focus to can-usage rates** China’s beer can-usage rate rose from 21.21% in 2016 to 29.56% in 2024, driving two-piece can demand from 28.96 billion to 31.55 billion cans (330ml standard). With annual beer output at 35 million kiloliters, each 1% increase in can-usage adds 1.06 billion cans. Compared to the U.S. and Japan, China’s can-usage potential remains underdeveloped.
**Supply inflection point amid anti-overcapacity efforts** In April 2025, ORG Technology completed its acquisition of CPMC, further concentrating two-piece can market share—CR3 now nears 80%. Leading firms are curbing domestic capacity growth while expanding overseas. ORG plans to relocate some production equipment abroad, signaling a domestic supply turning point. Prices may stabilize, aiding sector-wide profit recovery.
**Aluminum prices and can pricing jointly shape profitability** Aluminum cost fluctuations heavily impact margins. Baosteel Packaging’s 2024 data suggests: - Holding aluminum prices steady, a RMB 0.01/can price hike boosts unit profits by ~45%. - Holding can prices steady, a 2% aluminum price drop lifts unit profits by ~32%.
**Risks**: Two-piece can price recovery may lag expectations; raw material costs could swing sharply.
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