Positive fundamental outlook for VFY export of China

According to customs data, VFY export of China in May was 6.765kt, a decrease of 10% month-on-month and 1.7% year-on-year. The cumulative exports from January to May were 36kt, an increase of 9.1% compared to the same period last year. Based on this, it is estimated that the annual exports could reach 85-90kt, which may be slightly lower than the previous year but can still be maintained at a similar level.

From the perspective of unit price, both volume and price performed better in 2022-2023. The average price in Jan-May of 2024 was $300/mt lower than that of the previous two years. However, it is still worth noting as there is a possibility of price increases in the future.

In terms of trade flows, Indonesia, Pakistan, and Turkey remain the largest consumer markets, with Turkey showing the largest increase of nearly 40%. Major markets such as Italy, the Republic of Korea, Indonesia, Bangladesh, and Japan have experienced decreases in volume, while other regions have remained relatively stable. This indicates an increase in the concentration of consumer markets.

Overall, as of now, the export status of VFY is expected to be maintained this year, with stable overseas demand and support from downstream capacity expansion and order intake for Chinese domestic demand. The new capacity has been well digested, and the fundamental outlook is positive.