2023 is the first year to fully implement the spirit of the 20th National Congress of the Communist Party of China and promote the new journey of Chinese-style modernization. It is a year of changing international geopolitics and difficult progress of the global economy. In 2023, China's economy resumed development, showing a trend of recovery and improvement, and the supply and demand improved steadily, which provided important basic conditions and positive support for the smooth operation and development of the textile and chemical fiber industry chain. In this context, the economic operation of the chemical fiber industry throughout the year showed a positive trend: first, the production and sales of the industry were basically stable, and the market was relatively stable; second, the export of chemical fiber maintained a growth trend, and the export volume reached a record high; third, the operation of the industry gradually improved month on month, especially in the second half of the year; fourth, the high-performance fiber and bio-based fiber industry continued to develop steadily.
Basic Operation Situation of Chemical Fiber Industry in 2023
(I) production growth increased and inventory levels were normal.
In 2023, the growth rate of chemical fiber production increased from 2022. On the one hand, the equipment originally planned to be put into production in 2022 has been partially postponed to 2023 due to market conditions, making the production capacity concentrated again in 2023. On the other hand, the overall starting load of the industry is higher than that of the same period last year. Taking direct spinning polyester filament as an example, the first quarter was greatly affected by the Spring Festival, with an average starting load of about 67%. The average starting load in the second quarter was about 84%. The average starting load in the fourth quarter of 3. was about 90%. The annual average starting load is about 10 percentage points higher than that in 2022.
According to the statistics of China Chemical Fiber Association, the output of chemical fiber in 2023 was 68.72 million tons, up 8.5 percent year on year (Table 1). Among them, the output of lyocell fiber was 336000 tons, a significant increase of 138.3; the output of spandex was 960000 tons, an increase of 11.6; the output of polyester was 57.02 million tons, an increase of 8.7.
Table 1 Completion of China's chemical fiber output in 2023
In the case of high production and high start-up in the industry, the overall inventory of chemical fiber is still at a normal level. In polyester POY, for example, the annual average inventory is about 15 days, down 11 days from 2022, especially from June to September, the average inventory is below 15 days.
(2) Domestic demand is gradually picking up, and the pressure on terminal external demand is obvious.
The high growth of the supply side can not be separated from the support of the demand side, benefiting from the recovery of the social scene, the textile industry in 2023 domestic market demand toughness is strong, domestic textile and clothing goods retail significantly repaired. According to data from the National Bureau of Statistics, from January to December, the retail sales of clothing, shoes and hats, and knitwear products of units above the national limit increased by 12.9 year-on-year, and the growth rate rebounded sharply by 19.4 percentage points from 2022. The overall retail scale exceeded the 2019 level and was significantly better than the overall level of retail sales of consumer goods. At the same time, the growth rate of online retail has rebounded well, with retail sales of online wear goods nationwide increasing by 10.8 percent year-on-year in 2023, a sharp rebound of 7.3 percentage points from 2022.
Affected by factors such as shrinking overseas demand and rising trade environment risks, the export pressure of my country's textile industry increased significantly in 2023, but the resilience of industry development continued to appear in the field of foreign trade, and exports to some markets of the "Belt and Road" achieved better growth, driving textiles and clothing The decline in total exports gradually narrowed. China Customs Express data show that in 2023, China's textile and clothing exports totaled 293.64 billion billion US dollars, down 8.1 percent from the same period last year, and the growth rate was 10.6 percentage points lower than in 2022, but the cumulative decline has gradually narrowed since September. Among the main export products, the export value of textiles (textile yarns, fabrics and finished products) was 134.5 billion US dollars, a decrease of 8.3 percent year-on-year; the export value of clothing was 159.14 billion US dollars, a decrease of 7.8 percent year-on-year. Among the main export markets, my country's textile and apparel exports to the United States, the European Union, Japan and other markets have all decreased compared with the previous year, and exports to Turkey, Russia and other countries along the "Belt and Road" have steadily increased.
Overall, terminal demand improved from 2022, driving direct downstream demand for chemical fiber better than the same period in 2022. From the chemical fiber downstream of the main industries (plus elastic, loom, polyester yarn) start-up rate, are in recent years, the high level. Judging from the volume of light textile city, it is also slightly better than that of the same period in 2022, especially after September.
(III) exports maintain growth trend, export volume hits record high
In recent years, the division of labor in the global textile industry has continued to deepen, and the front-end of the industrial chain and intermediate product trade have become more active, reflecting the deepening of the integration of the industrial chain supply chain. my country's chemical fiber industry is the core participant of the international textile supply chain. According to Chinese customs statistics, chemical fiber exports were 6.5073 million tons in 2023, up 15.08 percent year-on-year (Table 2), up 6.32 percentage points from 2022, and exports accounted for 9.47 percent, up 0.76 percentage points from 2022. Among them, polyester filament and polyester staple fiber drove the growth of chemical fiber exports, with a year-on-year increase of more than 20%. For example, the average monthly export of polyester staple fiber was 100000 tons, far exceeding the level of the same period in previous years. From the perspective of export destinations, India, Turkey, Vietnam, Pakistan, Egypt, and Brazil are among the top six, and the export market is concentrated in emerging markets with rapid development of the textile industry. Among them, 702600 tons were exported to India, up 45.49 percent year-on-year, accounting for more than 10 percent of exports; 628000 tons were exported to Turkey, up 30.54 percent year-on-year, accounting for 9.65 percent of exports; and 609500 tons were exported to Vietnam, up 12.73 percent year-on-year, accounting for 9.37 percent of exports.
Table 2 Import and export of main chemical fiber products in 2023
(iv) Reduced price volatility and relatively stable markets
In 2023, the crude oil price center is lower than in 2022 and fluctuates more smoothly (Figure 1). On the whole, crude oil prices basically remained at 70-80 US dollars per barrel in the first half of the year, which was affected by the banking crisis in the United States and Europe, OPEC + production cuts, the Federal Reserve's interest rate hike, and the peak season for travel demand in Europe and the United States. In the third quarter, affected by the suspension of macro interest rate hikes and Saudi Arabia's production cuts, crude oil prices began to rise, rising by as much as 32.62, and exceeding US $90 a barrel in mid-late as possible, crude oil prices fell in shock, falling to about $70 a barrel at the end of the year.
Source: China Fiber Net
Figure 1 Trend chart of WTI oil price from 2022 to February 2024
PTA, chemical fiber prices basically follow the trend of crude oil prices, but the rise and fall of crude oil is more moderate (Figure 2), especially in the third quarter of crude oil prices rose significantly, PTA, chemical fiber prices rose limited, only up about 10%. Overall, chemical fiber prices generally stable fluctuations. Take polyester as an example, the annual price difference does not exceed 1000 yuan/ton. At the end of the year, the price of POY was about 7580 yuan/ton, up about 390 yuan/ton or 5.4 from the beginning of the year.
Source: China Fiber Net
Figure 2 Price trend of polyester and its raw materials from 2022 to February 2024
(V) revenue maintained growth and efficiency improved month-on-month.
In 2023, the economic efficiency indicators of the chemical fiber industry showed a positive trend. According to data from the National Bureau of Statistics, the operating income of the chemical fiber industry was 1097.526 billion billion yuan, an increase of 6.75 percent over the same period last year; since August, the cumulative year-on-year growth rate has turned positive. The total profit realized was 27.073 billion billion yuan, up 43.74 percent year-on-year, and since October, the cumulative year-on-year growth rate has turned positive; the reason for the significant year-on-year increase in profits is that, on the one hand, the economic operation of the industry has improved greatly in the second half of the year, and on the other hand, it is largely due to the low base in the fourth quarter of 2022. The chemical fiber industry contributed about 15.7 per cent of profits to the textile industry as a whole, up 4 percentage points from 2022, while the industry lost 25.52 per cent, down 6.41 percentage points from 2022, and losses of loss-making enterprises decreased by 35.38 per cent year-on-year (Table 3).
In terms of sub-industries, polyester, nylon, acrylic and spandex industries contributed about 39%, 19%, 1% and 5% of the total profits of chemical fiber respectively, of which the total profits of polyester industry increased significantly. In terms of sub-products, the profits of polyester filament showed a gradual repair trend, while the processing of polyester staple fiber was poor and maintained horizontally, and the benefits were not as good as those of polyester filament. The total profit of acrylic industry dropped significantly, mainly due to a rebound in the second half year.
Table 3 Economic benefits of chemical fiber and related industries in 2023
(vi) Decline in fixed asset investment and inertial growth in production capacity
According to data from the National Bureau of Statistics, fixed asset investment in the chemical fiber industry fell 9.80 year-on-year in 2023 (Figure 3), but in terms of actual new capacity, 2023 is still a concentrated investment period, and the chemical fiber industry's capacity is growing by inertia. The decline in investment in fixed assets means that the current cycle of production expansion in the chemical fiber industry is over, and the pressure on new production capacity in the industry will ease for some time to come.
Source: National Bureau of Statistics
Figure 3 Changes in the growth rate of fixed asset investment in the chemical fiber industry from 2008 to 2023
Prospect of chemical fiber industry in 2024
In 2023, facing multiple difficult challenges such as the increase of unfavorable factors in the international political and economic environment and the superposition of domestic cyclical and structural contradictions, China's macro-control policy "combination fist" has been effective, the economy has continued to rebound and improve, and high-quality development has been steadily promoted. The Central Economic Work Conference requested that in 2024, we must adhere to the principle of seeking progress while maintaining stability, promoting stability through progress, first establishing and then breaking, and more policies that are conducive to stabilizing expectations, stabilizing growth, and stabilizing employment, and changing methods, adjusting structure, improving quality, Actively forge ahead in increasing efficiency, and constantly consolidate the foundation for stability and improvement. It is expected that with the continuous recovery of my country's economy, the continuous improvement of the employment situation, the steady improvement and optimization of market supply, and the effective promotion of consumption policies, the foundation for restoring and expanding consumption will continue to be consolidated, which will support the economic operation of my country's chemical fiber industry. Continue to recover and improve.
Since the Spring Festival, chemical fiber varieties have different degrees of tired library, superimposed after the festival rain and snow weather led to the terminal recovery rhythm is slow, spring clothing sales have also been delayed, the market rhythm is expected to adjust. However, for the whole year of 2024, in terms of domestic sales, my country's textile and apparel consumer demand is still resilient. At the same time, the rich consumption circle, the continuous expansion of industrial textile applications, and the endless emergence of new online retail formats will continue to generate new consumer demand; export In terms of sales, with the change of the international division of labor status of my country's textile industry, the foreign trade structure of various major products in the industrial chain is being adjusted and optimized, it is expected that the export share of chemical fiber and its products will still show a good growth trend; on the supply side, the pressure on new production capacity will be eased, which will help avoid further escalation of the contradiction between supply and demand, but the release of new production capacity accumulated in the past two years It still needs the market to digest, and it is recommended that companies continue to do industry self-discipline.
In addition, the uncertainty of crude oil prices will still have an important impact on the economic operation of chemical fiber. In the context of global economic growth momentum is still weak, crude oil demand will remain under pressure, and the supply side is still relatively abundant, but OPEC is likely to continue to control production to maintain oil prices. From a financial point of view, the Fed is more likely to cut interest rates, which will help support oil prices. Overall, the global energy market is in the depth of adjustment to find a balance, 2024 still need to pay attention to changes in the geopolitical situation, the Federal Reserve interest rate cut process, the U.S. presidential election and other factors may bring large fluctuations in international oil prices.
2024 is a key year to achieve the goals and tasks of the 14th Five-Year Plan. The Central Economic Work Conference listed "leading the construction of a modern industrial system with scientific and technological innovation" as the first of the nine key tasks in 2024, and proposed to promote industrial innovation with scientific and technological innovation, especially to promote new industries and new industries with disruptive technologies and cutting-edge technologies. Models, new kinetic energy, and develop new quality productivity. The industry should unify its understanding and action with the decision-making and deployment of the Party Central Committee, accelerate the development of new quality productivity, and build a high-quality textile and chemical fiber modern industrial system. For example, focusing on cutting-edge technology, functionality, health, smart wear, biological sources, high-performance fibers, key equipment, etc., strengthen technological innovation, product innovation, and expand market demand; accelerate the application of digital technology, and gradually build enterprise smart workshops and smart factories System, while accelerating the construction of a new industrial structure through the industrial Internet; focus on energy conservation and emission reduction, green energy, recycling, degradable, low-carbon technologies, etc, actively explore sustainable development models, promote the construction of green manufacturing systems, and guide green consumption to help the "double carbon" strategy.