VSF import of China decreases sharply in 2020

VSF export of China was largely flat with that of 2019, while the import showed a trend of sharp decline. Among them, there was notable growth of demand from Pakistan that had become China's largest destination, while the export to Turkey and Indonesia declined sharply.

On a monthly basis, there was a temporarily low ebb of imports in April and July, while exports fluctuated greatly. Among them, export rush occurred in March and the export volume during April-June was much lower than the same period of past years due to the COVID-19 outbreak abroad, but it started to rebound sharply since August.

According to customs data, VSF import of Chinese mainland totaled 150.502kt in 2020, down 33.68% year on year. The import from Austria, Indonesia, India and Thailand declined sharply year on year. Only UK maintained the similar level of 2019 and changes in percentage of import origins were different. The share of Austria and UK expanded, while that of Indonesia and India narrowed.

VSF export of China in 2020 slightly improved year on year, totaling 375.599kt, up 4.06% on yearly basis. The export of ordinary fibers slightly increased, witnessing sharp reduction in April-July but drastic rebound during August-December.

VSF was exported from Chinese mainland to 68 countries (regions) in 2020, decreasing 1 compared with 2019. There was sharp increase of export to Pakistan that became the largest destination of China's VSF, with rising percentage from 19% to 23%. The export to Turkey, Indonesia and US declined, with percentage respectively falling by 18.07%, 15.37%and 5.75%. However, the export to Vietnam, Bangladesh and Chinese Taiwan grew much.

Due to the impact of COVID-19 outbreak in 2020, especially sharp reduction of demand both at home and abroad in the first half of the year, VSF plants kept lowering prices to boost sales. The price in China local market stopped falling and increased in August, while the price in overseas market stopped moving downward in September and soared in October when demand burst both at home and abroad.

VSF export of China is expected to keep growing in 2021, and imports will resume rapidly. We estimate that the international market will further recover in 2021 and VSF demand from overseas market is relatively optimistic, but the willingness of export is expected to weaken due to the impact of exchange rate and shipping. The export volume is expected to increase to 350-400kt.