PFY investment in North Jiangsu accelerates amid water-jet looms renovation

At the beginning of 2023, many factories are active in resuming work in various places, but a new round of water-jet loom shutdown appeared in Wujiang, Jiangsu, and the water-jet looms of some enterprises will be banned in 2023-2024.

Wujiang's water-jet loom renovation can be traced back to 5 years.

On June 9, 2017, the mobilization meeting for special renovation of water-jet looms was held in Wujiang District, Jiangsu Province. It was determined that by the end of 2019, the total number of water-jet looms in Wujiang District would be reduced from 342,000 to 238,000, and the reclaimed water reuse rate would be increased from 10% to 100%.

The subsequent task list for the special rectification of water-jet looms in Wujiang District showed that in 2017-2019, the total number of water-jet looms was planned to be reduced by 102,000 units, accounting for 30% of the elimination. 40855 units would be phased out in 2017; 30642 units would be phased out in 2018; 30641 units would be eliminated in 2019. After renovation, the water jet loom retained in Wujiang was about 240,000 sets.

After 2020, the outbreak of the epidemic further postponed the water-jet loom renovation task.

On the morning of December 30, 2021, the Ecological Environment Department of Jiangsu Province issued a notice that "Inspection undergoing/Urgent to strengthen the source control of some prominent environmental problems in Suzhou."

At the beginning of 2022, 8 sewage treatment stations were stopped for rectification, including Hongan (East and West) Station, Tanqiu Waterworks Station, Yuanqu Road West Station, Shuangshu Station, Xinan Station, Qizhuang Station, Qiaonan Village Station and Donggang Station.

After the Spring Festival in 2023, a new round of water-jet renovation starts again, affecting more than 1,100 water-jet enterprises, preliminarily estimated to cover about 70,000-80,000 sets of water-jet looms. Therefore, it is expected that by 2025, the number of water-jet looms in Wujiang will drop to around 160,000 sets, accounting for about half of the number before the renovation in 2017.

Among them, the rectification of East Taihu Lake, Qidu and Taoyuan is required to be completed in 2023, the rectification time of Shengze area is not clear, and the rectification of Fenhu and Zhenze areas is required to be completed in 2024.

After the rectification, does it mean that the amount of water-jet looms in China will shrink, and the consumption of PFY and NFY will decline absolutely?

Before the environmental protection renovation in 2017, some enterprises in Wujiang have made investment and gradually transferred equipment to North Jiangsu, Anhui, Jiangxi and other places in advance since 2015. After the renovation began in 2017, the new investment speed of water-jet looms accelerated in 2018, and several textile industrial parks appeared outside Wujiang. Based on this experience, after the renovation in 2023-2024, the quantity of water-jet looms outside Wujiang may increase again by multiples of the renovation quantity. It is expected that mainly North Jiangsu, Anhui, Jiangxi and Guizhou to see soaring quantity.  Some market personage reflects that Anhui factory rent has risen rapidly, Last year, the rent was 110 yuan but nobody asked. However, the rent has risen to 150-160 yuan in 2023.

As for the integration of upstream capacity, the investment of PFY rapidly increased in North Jiangsu. By the end of 2022, the capacity of direct-spun PFY has increased to 4.18 million tons in North Jiangsu, up by 1.65 million tons over 2021, accounting for 11% of the total direct-spun PFY capacity in 2022.

Recently, Tongkun Hengyang's new PFY unit with 300kt/year of capacity has started production. Xinfengming's first PFY plant in North Jiangsu will also commission operation in end-Feb. In addition, the capacity of direct-spun PFY is scheduled to be 1.75 million tons/year in North Jiangsu within 2023. If all these units are put into production, the capacity of direct-spun PFY capacity is estimated to be 6.53 million tons/year in North Jiangsu.

In the process of water jet capacity transfer, the raw materials are relatively complete, and the short board for future development may lie in the back-integration of auxiliary materials, maintenance and printing and dyeing etc.