As the first half of 2023 comes to an end, the demand for polyester and end-use textiles and apparel has varied performance, especially the gap in demand for export and foreign trade. The overall export of polyester products is improving and the growth rate is significant, but the export growth rate of end-use textile and apparel products is declining.
Textile and apparel export growth declines
According to China Customs data, from January to May 2023, China’s cumulative exports of textile and clothing products were US$118.2 billion, a year-on-year decrease of 5.3%, of which the cumulative export value of textiles was US$56.83 billion, a year-on-year decrease of 9.4%; the cumulative export value of clothing was US$61.37 billion, a year-on-year decrease of 9.4%. down 1.1%. Due to the sluggish overseas terminal retail consumption and the high domestic textile and apparel export base in the same period last year, the export growth rate declined.
Of course, the sluggish demand for textiles and clothing is not a domestic case, but the current actual situation around the world: For example, Vietnam, which has gained momentum in recent years-according to Vietnam’s Ministry of Finance and Customs data, Vietnam’s cumulative export value of textiles and clothing products from January to April 2023 was 9.72 billion. USD, down 18.1% year-on-year. Textile and apparel exports from other countries such as India, Turkey, Indonesia, Pakistan and Cambodia have declined to varying degrees. Investigating the reasons, it can be found that the slowdown in consumption growth in the United States and Europe, which are the main consumers of textile and clothing products, from 2023 to the present is one of the main reasons for the reduction in exports of most major textile and clothing producing countries. In recent years, both the epidemic and the geopolitical dispute between two countries in Europe last year have led to rising inflation and interest rates in Europe and the United States. Under this influence, the slowdown in economic and consumption growth has directly led to a slowdown in textile and apparel retail sales. Compared with the decline in export growth of terminal textile and apparel products, the current situation of upstream polyester product exports is relatively good.
Polyester exports grow, but market outlook is expected to fall
According to Chinese customs data, China’s polyester filament export volume from January to April 2023 was 1,373.37 thousand tons (including polyester high-strength yarn, the same below), a year-on-year increase of 33.04%; of which China’s polyester filament export volume in April was 338.73 Thousand tons, a month-on-month decrease of 6.90% and a year-on-year increase of 41.86%.
From the perspective of major export trading partners from January to April, exports to India ranked first with 192.60 thousand tons. At the same time, exports to India increased by 265.30% year-on-year and also ranked first; Egypt, Turkey, Brazil and Vietnam ranked 2-5 in export volume. Among the top five export trading partners, only Vietnam has a negative year-on-year growth in export volume, a year-on-year decrease of 1.01%. In addition, Pakistan ranked sixth, with exports decreasing by 21.66% year-on-year; the United States fell out of China’s top ten polyester filament trading partners, with exports decreasing by 24.61% year-on-year.
From a specific analysis, despite the mediocre domestic trade demand for polyester filament from January to April this year, the export and foreign trade increased significantly – from January to April 2023, the export volume of polyester filament was 1,373.37 thousand tons, a year-on-year increase of 341.06 thousand tons. Among them, exports to India were 192.60 thousand tons, a year-on-year increase of 139.88 thousand tons. India’s export increase alone accounted for more than 41% of the overall polyester filament export increase. It can be said that the polyester filament trade between China and India has increased to the greatest extent. This has stimulated the positive growth of China’s total polyester filament exports.
Through analysis and understanding, we learned that there are many reasons: First, the Bureau of Indian Standards will re-certify polyester products imported from China by BIS around July this year. Due to the long BIS certification cycle in India, both local downstream products in India Both factories and domestic suppliers are conducting transactions before the new certification period; secondly, there are a large number of Muslims in India, and the first quarter coincides with the Muslim holy month of Ramadan, which will affect the normal working hours of customs agencies, shipping companies and trading companies, so in Demand is significantly concentrated in front of the influence, and China’s polyester filament exports to India and even the total volume have increased significantly.
Among the top ten trading partners, Vietnam, Pakistan and Mexico are the only three with negative year-on-year export growth. Vietnam is mainly affected by the decline in domestic textile and apparel production and consumption. According to preliminary data from the Customs and Statistics Department of the Ministry of Finance of Vietnam, in January 2023 -In April, Vietnam’s textile and apparel exports fell by 18.1% to US$9.72 billion. At the same time, Vietnamese textile and apparel companies’ production decline due to poor orders led to a large number of layoffs or reduction of working hours. According to statistics from the General Bureau of Statistics of Vietnam, nearly 294,000 Vietnamese in the first quarter Workers at the company were stopped or had their working hours reduced. The reduction in total exports to Pakistan is mainly affected by foreign exchange tensions, inflation, the inability to settle overseas trade normally and the tight supply of electricity and other energy sources. The corresponding decline in manufacturing productivity has weakened the consumption demand for raw materials and the ability to pay.
Judging from the export expectations of the polyester filament market outlook, it seems difficult to maintain the strength from January to April: First, the front-end demand from India has basically been completed. After May-June, affected by the reset of BIS certification, China’s polyester filament yarn The total volume of silk exports to India is expected to shrink significantly, and the impact cannot be ignored. In addition, foreign exchange and energy supplies from trading partners such as Pakistan are still tight, and short-term demand may remain sluggish. However, the good news is that on June 2 this year, RCEP completed the process of taking effect for all 15 signatories – mutual implementation of tariff concessions. The implementation of RCEP has provided us withStabilizing foreign trade and foreign investment has played an important role. From a trade perspective, China’s polyester filament exports to RCEP member countries totaled 280.82 thousand tons, a year-on-year increase of 11.90%, accounting for 20.45% of the total.
Finally, returning to the demand for polyester, the growth rate of polyester exports is expected to decline in the next 6-7 months, and end-use textile and apparel products are likely to remain weak. Domestic trade in a nutshell: The next June to July is the traditional off-season for domestic textile and apparel. Although the demand for polyester in May was better than expected in the same off-season, but after the revaluation of commodities in May, the downstream logic of bargain-hunting is common. After entering June-July It seems difficult to continue in July. At the same time, there are varying degrees of bearish expectations from tracking the start-up, finished product inventory and terminal order index of downstream weaving. It is expected that the downstream start-up load capacity will decline significantly after mid-June, and negative feedback will gradually put pressure on the polyester industry. In the ester product segment, considering the current polyester inventory (taking polyester filament as an example), the average POY inventory is less than 15 days. Therefore, even if the load of downstream looms is reduced as scheduled, the load reduction of polyester under the influence of negative demand feedback will be obvious and placed downstream. , at least throughout June, the possibility of large-scale load reduction of polyester is very small.