Prominent changes in nylon export structure since COVID-19

On the basis of the substantial increase in exports in 2021, China's export of nylon products have maintained a rising momentum in 2022, and the export growth of many products in May 2022 is very prominent.

In 2022, nylon products with a year-on-year growth rate of 20-40% sees slower increase compared with the same period last year. The main reason is that compared with the export volume under the impact of the epidemic in 2020, the recovery growth in export in 2021 was too large.

1. CPL export grows dramatically on small base

CPL: In China, CPL has always been a net import. However, the expansion of overseas CPL production capacity is basically in a stagnant state, and some plants are gradually withdrawing. The global development focus is on Chinese mainland. With the advantages of price, complete industrial chain and quick market responses, China's CPL flake export has achieved rapid growth. The export volume of CPL is obviously smaller than that of other products in the industrial chain, but since the base volume is small and the growth rate is outstanding.

2. Nylon 6 chip export grows strongly, and film export ushers in a new breakthrough

Nylon 6 chip: The export growth rate of nylon 6 chip in 2021 reached as high as 108% year-on-year. On the basis of that, the export growth in 2022 is still strong. The export volume in the first five months has increased by more than 40% year-on-year, the highest growth rate in the industrial chain (except CPL). And the export is focusing on non-textile-grade chips. Exports to India has increased most prominently, while exports to Japan has declined, with minor changes to other regions.

Film: With the outbreak of the epidemic in the first half of 2020, the export of nylon film increased sharply. With the normalization of the epidemic, the export of film has gradually returned to the steady growth range, and the growth rate of film export in 2021 was only 7% year-on-year. However, the export volume in 2022 has increased again, and the cumulative export from January to May 2022 has risen by 18% year-on-year, of which the export volume in May hit a record high. In 2022, exports to South Korea, Indonesia, and Japan see strong growth, while exports to India shrink slightly.

3. NIY export growth accelerates, but cord fabric export falls

Cord fabric: The export volume of nylon cord fabric increased by 48% year-on-year in 2021. Due to limited production capacity, the surge in demand boosted the long-lost high profits in the cord fabric. However, in the first half of 2022, the export volume has lingered low from February to April, resulting in a negative year-on-year growth in cumulative exports from January to May. This change is due to price fluctuations and weakening demand. In May 2022, the export volume has rebounded to the level of the same period in 2019 and 2021, but it is difficult to continue to break through.

Industrial filament: Nylon industrial filament exports are much stronger. In 2019-2021, the growth of industrial filament exports was not obvious. Since the fourth quarter of 2021, exports have begun to grow significantly. The cumulative export volume from January to May in 2022 has increased by as much as 28% year-on-year. Particularly in in April-May, a traditional offseason for NIY export (export in Apr-May normally dropped month-on-month), the export still achieved prominent growth. Among the export, the growth of high-tenacity filament is relatively prominent, while the export growth of industrial filament for cord fabric is relatively weak.

4. Nylon POY/FDY/HOY export grows more than DTY

Nylon textile filament: In 2021, the export of nylon textile filament increased significantly, mainly as it repaired the demand gap during the outbreak of the epidemic in 2020. The growth rate of nylon POY/FDY/HOY reached 76%, which was twice the growth rate of DTY. In 2022, the impact of the epidemic has weakened, and the growth rate of nylon POY/FDY/HOY exports has slowed down.

From January to May 2022, nylon textile filament exports have increased by 20% year-on-year, but POY/FDY/HOY exports have grown by 31% year-on-year, which is significantly higher than DTY.

Exports of nylon POY/FDY/HOY is evidently better than that of DTY. Except for the reason that the epidemic in 2020 has reduced POY/FDY/HOY exports more evidently, the export demand for POY/FDY/HOY has indeed grown more than that of DTY in the past two years.

However, the exports of both nylon POY/FDY/HOY and nylon DTY have decreased month-on-month in May 2022, which is contrary to the trend of the same period last year and the trend of other products in the industrial chain.

5. Textiles and apparel export maintain solid growth

Textiles & apparel: The monthly change trend of the export value of textiles and apparel in 2022 is the same as that of the same period in previous years. Exports have increased month by month in both April and May. However, the export growth rate in May has risen significantly. This is mainly due to the lower impact of the epidemic in China in May, and the improvement of the production and logistics, and the backlogged orders in previous months. In addition, the devaluation of the RMB has also improved the competitiveness of apparel exports to a certain extent.

Conclusions of the changes of export in nylon industrial chain

1. In 2022, the exports of all links of nylon industry chain have increased, with considerable growth rates. It is mainly due to the price advantage, the stable supply chain and the staged support of advantageous exchange rates.

2. For products that are more sensitive to price, the export growth is relatively prominent, and the growth is still expected to rise up. (The further upstream, the more obvious export advantages are, such as CPL, nylon 6 chip.)

3. With the recovery of production of other export-oriented economies, China's export faces downward pressure. This factor has a relatively obvious impact on the export of textiles, apparel and other end use products, and the same is true for cord fabrics. (The further you go to the terminal, the greater the pressure on export growth)

4. Except for price advantage, some products' export growth is indeed demand-oriented, such as industrial filament (high-tenacity filament).