Demand growth point of polyester filament yarn in 2023

Rapid recovery of domestic demand

Based on the consumption data of goods from Jan to Aug, essential consumer goods continued to maintain stable positive growth, although the growth rate has slightly slowed compared to the previous year. Optional consumer goods, especially textiles and apparels, have shifted from negative to positive growth, with a growth rate surpassing other goods. Construction-related consumer goods, such as building materials, continued to experience negative growth due to sluggish real estate sales. Automotive consumption has seen an increase in growth rate, thanks to various policies and the stimulus of price reductions.

Surging replacement demand for polyester fiber

Hot sales of sunscreen clothing in 2023 strongly support demand for nylon. Among the chemical fiber products, nylon industry chain witnesses the best fundamental in 2023, with ongoing high run rate and robust inventory. Sound sales of sunscreen clothing also greatly stimulate demand for polyester fiber. Sales of polyester/spandex sunscreen clothing are good too driven by low price.

Demand for cotton-like filament also grows. Cotton price hikes in 2023 and cotton yarn and polyester/cotton yarn producers face heavy losses. The run rate of cotton yarn mills and polyester/cotton yarn plants continued falling in the second half of 2023, while the operating rate of polyester fiber plants and polyester yarns sustained high. Soaring cotton price leads to expanding spread between cotton and polyester fiber to the multi-year high. Under the background of consumption degradation, CVC yarn replaces 100% cotton yarn and cotton-like filament replaces 100% polyester yarn.

Growing demand for sunscreen clothing and cotton-like products in 2023 greatly stimulates demand for dull PFY. Some top PFY companies shift production in 2023. Some turn to produce dull PFY from semi-dull PFY, covering 1.10 million tons of capacity.

Hiking exports of PFY

PFY exports amounted to 3110kt in Jan-Sep, 2023, up by 29% year on year. On one hand, exports of fibers grew resulted from the transfer of orders for textiles and apparels. On the other hand, China-made PFY enjoys price advantage, especially compared with India.

Plunging export value of textiles and apparels but growing export volume of chemical fiber fabrics and apparels 

From Jan to Aug in 2023, China's textile and apparel exports totaled US$197.21 billion, down 10% from the same period of last year. With falling consumption of textiles and apparels + destocking cycle outside China, the growth rate of export value in major textiles and apparels exporting countries has declined significantly. Excluding the impact of the exchange rate, China's textile and apparels exports fell 3.9% in yuan terms from Jan to Aug compared with the same period of last year.

From the perspective of export structure, the number of downstream cotton products (fabrics and apparel) decreased relatively significantly, but the number of chemical fiber downstream products still increased.