VFY export of China likely to set a record high in 2022

According to customs data, VFY export of China from Jan to Sep 2022 has reached 79kt. Although the export volume in Sep has dropped from the previous month, it is still in a good state. Even if there is a notable reduction in the fourth quarter, the export throughout the year is likely to exceed 100kt or even 110kt, setting a record high in history. At the same time, the average price is still rising, overtaking $6,000/mt in Sep and returning to the level of a decade ago.

Half of China's VFY is exported to India, while the percentage of Pakistan, whose consumption used to be similar to that of India has decreased to 20% and the export to Turkey just accounts for 12% of total volume. This trend of increasing concentration seems to be very similar to the changes on the supply side of China, and the advantages of large enterprises are more prominent in difficult times.

However, rayon embroidery thread does not have this feature, as its export volume and average price can is still in post-epidemic recovery, and there is still a gap compared to a long time ago. It was mentioned before that the overseas transfer trend of VFY downstream processing and manufacturing is becoming more and more obvious, and is even accelerating. As the most important product, embroidery thread can be seen from its performance.

In addition, India is also the largest buyer of VFY downstream products. According to the customs data from Jan to Sep, India ranking the second place accounts for 1/3 of China's embroidery thread exports, which is followed by Vietnam that takes up about 20% of total volume.

In conclusion, the production of VFY is still a unique advantage in China, and the market can still be underpinned to some extent by relying on that advantage, but downstream sectors need to find more possibilities and way out.