Apparel / Textiles & Accessories

In 2022, facing a complex and severe internal and external development environment, China's chemical fiber industry faces unprecedented challenges in operation. However, there are still many highlights in the operation of the industry. The domestic carbon fiber industry still maintains a high level of momentum, the scale of the bio based fiber industry maintains rapid growth, the research and development pace of differentiated and functional fibers is accelerating, and exports continue to maintain a good growth trend, with export volumes reaching new highs.

Looking ahead 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-demand relationship can be improved becomes the key to the stable recovery of the industry's operation.

Slow down in chemical fiber production, first negative increase in production

Customs data shows that in 2022, chemical fiber production slowed down and production showed 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, marking 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% 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 growth in household income and slow recovery of consumption scenarios. Customs data shows that 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, a slowdown of 4.8 percentage points compared to 2021. However, since June, there has been continuous positive growth, and clothing consumption such as sports, outdoor, and health care still has good growth resilience.

In terms of external demand, China's total textile and clothing exports reached a new high in 2022, maintaining a level of over 300 billion US dollars 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, a year-on-year increase of 2.5%. Among the main export products, the export value of textiles reached 156.84 billion US dollars, 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 184.11 billion US dollars, a year-on-year increase of 3.4%.

Continuously increasing exports and enhancing competitive advantages

According to customs data, the export volume of chemical fibers in 2022 was 5.6545 million tons, an increase of 8.76% year-on-year, an increase of 1.22 percentage points compared to the average annual growth rate since the 13th Five Year Plan (2015). The China Chemical Fiber Industry Association believes that in the difficult situation of 2022, the growth of chemical fiber exports reflects the increase in international market demand and the improvement of China's competitiveness in chemical fiber products. Among them, the export of acrylic fiber increased significantly year-on-year. Analysis of its reasons: Firstly, the closure of a 200000 ton factory in Europe at the beginning of the year resulted in a supply shortage; Secondly, since the beginning of the year, the overall depreciation of the RMB has been observed, which has given rise to the price advantage of acrylic fiber exports; Thirdly, compared to countries and regions such as India, there are also certain advantages in the quality of domestic products.

In addition, the export performance of polyester bottle chips has been impressive in the past two years. 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: firstly, since the fourth quarter of 2021, some overseas units unexpectedly shut down and were unable to resume normal production in a short period of time. Since 2022, the situation in Russia and Ukraine has affected global energy tension, and overseas units have had low enthusiasm for starting operations due to high costs, resulting in a significant gap in overseas bottle and chip supply; Secondly, with the easing of the epidemic, overseas market demand is gradually recovering; Thirdly, 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-effectiveness; Fourthly, the production capacity of domestic bottle chips has increased, while the growth in domestic demand is limited. Therefore, the factory is actively expanding its export market. The combination of multiple factors has brought China's polyester bottle chip exports to a new historical high.

Revenue maintains growth and profits decrease significantly

The economic performance indicators of the chemical fiber industry in 2022 have significantly decreased year-on-year. According to customs data, the business revenue 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 to the entire textile industry, a decrease of 13 percentage points compared to 2021; The industry's loss area 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.

In terms of industries, the polyester, nylon, acrylic, and spandex industries respectively contributed about 31%, 29%, 6%, and 6% of the total profit of chemical fibers. Among them, the total profit of the acrylic industry has significantly increased, while the spandex industry has significantly decreased due to its high base in 2021, but it is still higher than the pre pandemic level. It is worth noting that the carbon fiber industry still maintains a high level of momentum, with increasing market demand and rapid growth in production capacity. The entire industry will continue to achieve profitability in 2022.

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

Persist in prioritizing 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 the industry's 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 growth of clothing, shoes, and hats consumption. However, the transitional period of the epidemic may still cause periodic fluctuations in the domestic market; The pressure on the textile and clothing export market is increasing, and the growth space of 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 rate of intermediate products such as yarn and fabrics in China may slow down, and the export of chemical fiber products is expected to remain stable.

From the supply side perspective, 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 sustained 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 technology, consumer upgrading, and major needs, and improve its innovation system; We will give priority to 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, enhance business management capabilities, and promote the modernization of the industrial chain.