How deep does India's BIS certification affect China polyester exports

China's polyester exports surged during Jan-May 2023, drawing much attention. One of the factors that drove up the exports came from India's BIS certification policy. India is expected to implement BIS certification, and thus some materials were exported to India in advance before the implementation and demand in the latter half year was pulled forward to the first half year. Then, how deep did the policy affect China polyester export? Let's have a glance at the data.

Increase of polyester exports from China during Jan-May 2023

It can be seen that China polyester exports to India increased considerably by 274kt during Jan-May, accounting for 42% of the growth. In terms of product, PFY recorded the biggest increase in exports, followed by PET bottle chip, while the increment in PSF and BOPET exports to India was limited.

China's PET bottle chip exports to India were restricted due to India's anti-dumping investigation since 2020. The increase in exports to India this year was mainly attributed to disruptions to local feedstock supply in India, and thus the sustainability can not be ensured.

India's BIS certification policy mainly affected PFY, with the market resorting to China PFY exports in advance to avoid the risk brought about by the policy.

Regarding to the BIS policy starting from Jul 3 for PFY, there's no further news for now. However, it is for sure that the high growth of volume of PFY exports to India would not sustain.

According to customs data, China's PFY exports to India reached 306kt throughout 2022. During Jan-May 2023, the exports were 266kt, and given the exports at 40kt in Jun, the total amount in the first half of 2023 would reach the full-year amount in 2022. (In fact, PFY exports averaged 53kt a month in Jan-May 2023, and stood at as high as 74kt in May.)

In a conclusion, it would be difficult for polyester exports to India to sustain the sharp increase, as the overall orders in 2023 are not so optimistic and some demand in the latter half year has already been pulled forward, even if without restriction from BIS certification.