Apparel / Textiles & Accessories

In 2022, faced with a complex and severe internal and external development environment, the operation of China's chemical fiber industry encountered unprecedented challenges. However, there are still many bright spots in the operation of the industry. The domestic carbon fiber industry still maintains a high momentum, the scale of the bio-based fiber industry maintains rapid growth, the pace of research and development of differentiated and functional fibers is accelerating, exports still maintain a good growth trend, and the export volume has reached a new high.

Looking forward to 2023, the China Chemical Fiber Industry Association predicts that the operation of the chemical fiber industry will still face pressure from both supply and demand, and whether the supply and demand relationship can be improved becomes the key to the stable recovery of the industry's operation.

Chemical fiber production slows down and production first exhibits negative growth

According to customs data, in 2022, chemical fiber production slowed down, and production experienced negative growth for the first time. According to the statistics of the China Chemical Fiber Industry Association, the chemical fiber production in 2022 was 64.88 million tons, a slight decrease of 0.55% year-on-year. This is the first negative growth in chemical fiber production in nearly 40 years. Among them, except for the production of viscose filament and acrylic fiber, which increased by 7.45% and 16.70% respectively year-on-year, the production of other major products showed negative growth.

From the perspective of domestic demand, in 2022, the domestic consumer market will be under pressure due to factors such as slower income growth and slow recovery of consumption scenarios. According to customs data, in 2022, the retail sales of clothing, shoes, hats, and textiles above designated size nationwide decreased by 6.5% year-on-year, with a sustained negative growth rate since March; The retail sales of online clothing products increased by 3.5% year-on-year, which was 4.8 percentage points slower than that in 2021. However, since June, they have continued to grow positively, and clothing and clothing consumption such as sports, outdoor, and health care still has a good growth toughness.

In terms of external demand, in 2022, China's total textile and clothing exports reached a new high, maintaining above $300 billion for the third consecutive year. The increase in export prices has played an important supporting role. According to customs data, China's total textile and clothing exports in 2022 reached 340.95 billion US dollars, an increase of 2.5% year-on-year. Among the main export products, the export value of textiles reached US $156.84 billion, a year-on-year increase of 1.4%. The export of supporting products in the industrial chain such as textile fabrics and chemical fibers is an important growth point; The export value of clothing reached US $184.11 billion, up 3.4% year-on-year.

Continuous growth of exports and improvement of competitive advantage

According to customs data, the export volume of chemical fiber in 2022 was 5.6545 million tons, an increase of 8.76% year-on-year, 1.22 percentage points higher than the average annual growth rate since the "13th Five Year Plan" (2015). The China Chemical Fiber Industry Association believes that under this difficult situation in 2022, the growth of chemical fiber exports reflects the increase in international market demand and the improvement in the competitiveness of China's chemical fiber products. Among them, acrylic fiber exports increased significantly year-on-year. Analysis of the reasons: First, the closure of a 200000 ton factory in Deutschland in Europe at the beginning of the year led to a supply gap; Second, the overall depreciation of the RMB since the beginning of the year has increased the price advantage of acrylic fiber exports; Third, compared to countries and regions such as India, domestic product quality also has certain advantages.

In addition, the export performance of polyester bottle chips in the past two years has been remarkable. According to customs data, the export volume increased by 36.03% year-on-year in 2021, and continued to increase significantly by 35.67% in 2022. According to the analysis of the China Chemical Fiber Industry Association, the main reasons are as follows: First, since the fourth quarter of 2021, some overseas devices unexpectedly shut down and failed to resume normal production within a short period of time. Since 2022, the situation in Russia and Ukraine has affected global energy tensions. Due to the high cost of overseas devices, the enthusiasm for starting operations is not high, and there is a significant gap in the supply of overseas bottles and chips; Second, as the epidemic eases, overseas market demand gradually recovers; Third, although the export price of Chinese polyester bottle chips has also increased, compared to overseas products with high energy costs, Chinese polyester bottle chips have a higher cost performance ratio; Fourth, the production capacity of domestic bottle chips has increased, while the growth of domestic demand is limited. Therefore, the factory actively expands the export market. The superposition of multiple factors has brought China's polyester bottle chip export to a new historical high.

Revenue maintained growth and profit decreased significantly

In 2022, the economic benefit indicators of the chemical fiber industry decreased significantly year-on-year. According to customs data, the business income of the chemical fiber industry remains at a trillion yuan level, reaching 1090.074 billion yuan, an increase of 5.32% year-on-year; The total profit achieved was 24.129 billion yuan, a year-on-year decrease of 62.22%. The chemical fiber industry only contributed about 12% of the profits of the entire textile industry, a decrease of 13 percentage points compared to 2021; The loss area of the industry was 31.93%, an increase of 14.63 percentage points compared to 2021, and the loss amount of loss-making enterprises increased by 102.67% year-on-year.

By industry, the polyester, nylon, acrylic, and spandex industries contributed approximately 31%, 29%, 6%, and 6% of the total chemical fiber profit, respectively. The total profit of the acrylic industry increased significantly, while the spandex industry decreased significantly due to its high base in 2021, but was still higher than the level before the epidemic. It is worth noting that the carbon fiber industry continues to maintain a high profile, with increasing market demand and rapid growth in production capacity. In 2022, the entire industry will continue to achieve profitability.

The China Chemical Fiber Industry Association pointed out that in the context of sluggish demand and severe industry conditions, the larger the scale of enterprises, the greater the pressure on production and sales. Some large enterprises have actively limited production, resulting in higher operating costs per unit product and little improvement in profitability, but making room for more flexible small and medium-sized enterprises.

Adhere to the priority of energy conservation and carbon reduction to increase the supply of high-quality products

Looking forward to the whole year, the China Chemical Fiber Industry Association predicts that the operation of the chemical fiber industry still faces pressure from both supply and demand, and whether the supply and demand relationship can be improved becomes the key to the stable recovery of industry operation.

From the perspective of terminal demand, the domestic market has a stable recovery foundation, and the improvement of residents' income and expectations provides important support for the consumption growth of clothing, shoes, and hats. However, the transition period of the epidemic may still cause periodic fluctuations in the domestic market; The pressure on the export market of textiles and clothing is increasing, and the growth space for clothing consumption in developed economies is limited. At the same time, the demand for supporting industrial chains in emerging economies is facing downward pressure. The export growth of intermediate products such as yarns and fabrics in China may slow down, and the export of chemical fiber products is expected to remain stable.

From the supply side, chemical fiber production capacity is still likely to maintain inertial growth. The China Chemical Fiber Industry Association reminds that before demand effectively increases, industry enterprises should focus on controlling new production capacity, avoiding further escalation of supply and demand contradictions, in order to maintain the sustainable and stable development of the chemical fiber industry.

Facing new strategic opportunities and tasks, new strategic stages and requirements. The China Chemical Fiber Industry Association suggests that the chemical fiber industry should face the forefront of science and technology, consumer upgrading, and major needs, and improve the innovation system; Adhere to the priority of energy conservation and carbon reduction, expand green fiber production, and build a clean, low-carbon, and circular green manufacturing system; Increase the supply of high-quality products, cultivate well-known fiber brands, and expand fiber application fields; Accelerate digital and intelligent transformation, improve operation and management capabilities, and promote the modernization of the industrial chain.