Staff members work on the face mask production line at the workshop of GAC Component Co., Ltd. in south China's Guangdong Province, Feb. 20, 2020. (Xinhua/Deng Hua)

As domestic demand for face masks plunges thanks to the ebb of the COVID-19 outbreak in China, small newcomers to the sector are now struggling to make a profit.

"In only 40 days, I lost 780,000 yuan ($109,536)," Liao Yongwang, a 31-year-old businessman in Shenzhen, South China's Guangdong Province, told the Global Times on Thursday.

When masks were still in tight supply in mid-April, Liao bought a KN95 mask machine costing 850,000 yuan and sold masks to a factory. But in less than a month, he faced a nightmare -- the factory stopped buying the masks in May due to a glut.

Liao put his machine up for sale on May 13 at a minimum price of 190,000 yuan, but he's had few inquiries. To repay debts of hundreds of thousands of yuan, he is now working as a porter.

Liao's experience reflects the struggles of many newcomers and speculators in the mask sector. A face mask machine producer in Guangzhou even posted an ad online, aiming to sell 100 machines at low prices, with immediate delivery.

Ironically, at the early stage of the epidemic, it could take one or two months to have a machine delivered.

The price of melt-blown fabric, a key material in medical masks, dropped sharply too. Chen Lianjie, an executive at Zhejiang Kanglidi Medical Articles Co, told the Global Times Thursday that the price of the material has dropped by two-thirds from a peak in April to about 200,000 yuan a ton now.

Large volumes of low-quality melt-blown fabric were squeezed out of the market due to tightened regulations and industry standards. In April, authorities in Yangzhong, a city in East China's Jiangsu Province, banned 867 companies from making the fabric.

While small newcomers feel the most pain, large enterprises that shifted to manufacturing face masks are finding it easier to change course as orders dry up.

Chen said the company has enough export orders to last until the end of June. "We're going back to making wound dressings," he said, noting that there are enough orders for these products to last until October.

Chinese oil giant China Petroleum & Chemical Corp (Sinopec) is another company that expanded into the face mask industry during the global pandemic by investing heavily in melt-blown fabric production lines.

A manager at Sinopec surnamed Lü said that the company will continue to manufacture the material as long as it's needed. Then, it will decide whether to continue production based on market principles and value to the company.