Conjecture on the large increase of China’s PSF exports

In Jan-Apr, 2023, China PSF exports reached 407kt, up 100kt or 32.6% from the same period of last year. What is the reason for the large rise and how is the continuity? Do other products have similar situation?

PFY exports are also good this year, and the exports grew by over 30% in the first four month of 2023. The higher exports of PFY are mainly because of BIS certification, as some orders need to be exported earlier.

Polyester yarn exports are normally at 400-500kt in previous years, taking a share of 15% of the output. In Jan-Apr, 2023, polyester yarn exports reached 151kt, down 10.4% year on year.

Compared with the exports of PSF and polyester yarn, we see in the red part that the large increases in exports of PSF corresponds to the regions where the exports of polyester yarn have sharply declined. This makes us think that the textile imports in Southeast Asia are gradually shifting to upstream market, and in PSF industrial chain, the imports have progressed to the PSF this year.

Looking from the textile and apparel exports in recent years, China's exports to ASEAN are gradually increasing, and in 2022, it has taken the first place surpassing Europe and U.S. In terms of the export products, exports to Europe and U.S. are mainly the finished apparels, and exports to ASEAN are mainly fabric and yarn. Therefore, foreign exports are indeed transferring gradually.

In addition, looking from rayon yarn exports, its proportion in some textile bases dropped largely, and VSF exports also declined. The top three VSF export destinations are Turkey, Pakistan and Bangladesh, which is in line with the increases of PSF export destinations. Therefore, in these regions, PSF may tend to squeeze the market of VSF.

Therefore, the large rise of PSF exports this year is partly driven by the industrial transfer, partly due to the possibility of squeezing the market shares of VSF. The trend of the former is irreversible and will continue to drive the booming development of the PSF exports, while the latter may be affected by factors such as order preferences and may revert back and forth.