China's PFY exports keep high in Jul but lack momentum

According to the data from China customs, PFY exports were at 290.4kt in Jul, down 7.6% on the month and up 24.8% on the year. In Jan-Jul, PFY export amounted to 1918.2kt, up 2.85% on annual basis.

Exports of PFY in Jul far exceeded expectation too as there was bigger time gap between the actual offtaking and delivery of orders compared with previous years impacted by the pandemic prevention and control, the port congestion, the delay of shipping schedule and fluctuating sea freight etc.

Due to low export volume in Jul 2021, exports of PFY rose much on the year by varieties in Jul 2022, but decreased on the month. Among this, exports of DTY decreased less than those of POY and FDY. Based on the orders traced by CCFGroup, the situation differed in Aug. Export orders of DTY apparently dropped on the month in Aug while those of POY and FDY reduced slower. Overall export of PFY is expected to extend lower in Aug.

As for the export destinations in Jul, exports to Egypt and Brazil increased greatly on the month and on the year, while those to India, Pakistan, Turkey, Indonesia and Bangladesh descended substantially month on month.

Mainly impacted by the anti-dumping tariff, exports of China-made PFY that reach Brazil before end-Aug will be waived the ADD. Jul would be the last chance based on 30-50 days of shipment days. Therefore, the delivery of orders was intensive in Jul, but export to Brazil is estimated to apparently fall from Aug.

Exports to Egypt obviously accumulated in Jul, which was mainly related with reducing sea freight. By last week, the freight from Ningbo to Egypt/SOK dropped to near US$4,200/40HQ, down by more than 50% from the high level. The delivery of orders taken before was intensive after freight decreased, while such phenomenon lacked durability.

Pakistan was in predicament in terms of economic development. The trade deficit expanded with surging inflation. Status improved recently, while various difficulties have not been solved completely. The export income fell by 5.17% in Jul. Textile industry was greatly affected. Demand for PFY is estimated to be dampened further in later period.

Exports to India slipped obviously in Jul as there was intensive procurement in Jun. Inquiries were active in Aug, with low price but big quantity. Exports of PFY is expected to rise on the month in Aug but may be unstable later restricted by low price.

Remark: the freight of different ships is greatly different even under the same route, and the above freight is only for reference.

Among the major routes of PFY export in Jul, the freight of most routes moved down, excluding rising freight to Brazil. In Aug, the freight all extended lower. By last week, the freight from Ningbo to Brazil/NAV decreased to near US$8,800/40HQ, down by more than $1,000 compared with early-Aug, and those to Pakistan/Karachi was near US$2,500/40HQ, down by $400-500 over early-Aug.

Reflected by some traders and forwarders, most routes witnessed inadequate cargos but ample ships, while the freight may reduce slower as it has slumped before. However, the downtrend may continue due to subdued demand.