The decline in output of the chemical fiber industry continues to narrow

Edited by Zhao Xinhua,Zhong Mengxia

In May, crude oil bottomed out, the cost end of chemical fiber was obviously supported. Te decline in some indicators of the operation of the chemical fiber industry was narrower than that from January to April, but the terminal demand recovery was lower than expected. Te global pandemic situation has not shown any signs of improvement, and the situation of chemical fiber industry is still grim.

Domestic demand for textile and apparel is weak, and exports are blocked, but the decline has narrowed. In terms of domestic demand, according to data from the National Bureau of Statistics, the retail sales of apparel, shoes, hats and knitted textiles in units above designated size in the country from January to May fell by 23.5% year-on-year, a decrease of 26.1 percentage points from the same period last year, and the decline was narrowed by 5.5 percentage points from January to April; retail sales of online wearables decreased by 6.8% year-on-year, a decrease of 28.0 percentage points from the same period last year, the decrease was 5.2 percentage points narrower than that from January to April. In the textile and apparel industry’s demand for chemical fiber products, in addition to the nonwovens output increasing by 2.46% year-on-year, the output of cotton blended yarn, chemical fiber yarn, cotton blended fabric, chemical fiber staple fiber, and cord fabric all decreased year-on-year 29.96%,11.84%, 43.34%, 12.05%, 10.44%, the decline of most products narrowed slightly from January to April. In terms of external demand, according to China Customs data, China’s textile and apparel exports amounted to USD 100.62 billion from January to May, a year-on-year decrease of 2.3%, and the decline continued to narrow by 8.2 percentage points from January to April, and the decrease rate was increased by 0.4 percentage points from the same period last year.

Te decline in chemical fiber output continued to narrow. According to data from the National Bureau of Statistics, China’s chemical fiber output was 22.94 million tons from January to May, a year-on-year decrease of 3.16%, and the decline rate continued to narrow by 1.81 percentage points compared with January to April. Among them, the output of viscose staple fiber was 1.1488 million tons, a year-on-year decrease of 34.34%, the decrease is 4.84 percentage points deeper than that from January to April; polyester production was 18.1452 million tons, a decrease of 2.30% year-on-year; spandex production was 316,900 tons, a decrease of 0.49% year-on-year, which did not continue the growth trend from January to April;nylon output was 1.6361 million tons, an increase of 1.30%year-on-year, reversing the decline from January to April.

Te international trade situation is grim, and the decline in chemical fiber imports and exports continues to deepen. According to China Customs data, China imported 313,700 tons of chemical fiber from January to May, a year-on-year decrease of 17.19%, a decrease of 2.32 percentage points deeper than that from January to April, and the imports of major products all showed varying degrees of reduction. In terms of exports, due to the overseas pandemic situation, the export volume of chemical fiber fell.From January to May, the export volume was 1.6661 million tons, a year-on-year decrease of 16.90%, and the decline was 9.2 percentage points deeper than that from January to April. Among them, polyester staple fiber exports fell by more than 30%, polyester filament exports decreased by 13.31%, nylon filament exports decreased by 16.42%, viscose filament exports decreased by 24.37%, viscose staple exports decreased by 17.07%; market demand of spandex mask ear tape has declined, and the export volume changed from January to April growth to a 6.17% year-onyear decrease from January to May.

Te economic efficiency of the industry has dropped significantly, and the rate of decrease has been narrowed month-on-month. According to data from the National Bureau of Statistics, the operating income of enterprises above designated size in the chemical fiber industry from January to May was 286.292 billion yuan, a year-on-year decrease of 17.97%, a decrease of 1.99 percentage points from January to April; the total profit was 4.097 billion yuan, a significant decrease of 59.13% year-on-year, the decline rate was narrowed by 1.31 percentage points from January to April, in which the polyester and nylon industries decreased by 90.40% and 7.72% year-on-year respectively. The operating income margin was only 1.43%, a decrease of 1.63 percentage points from the same period last year. Te percentage of loss-making enterprises was 42.25%, an increase of 16.2 percentage points from the same period last year, and the loss of loss-making enterprises increased by 100.15% year-on-year.

Investment confidence is insufficient, and fixed ass et investment has shrunk substantially year-on-year. From January to May, the fixed-asset investment in the chemical fiber industry decreased by 23.2% year-on-year, a decrease of 9.6 percentage points from the same period last year and 7.0 percentage points from January to April,reflecting the lack of investment confidence of enterprises,but some key enterprises in the industry are still steadily promote the construction of new projects.

Chemical fiber industry for China is an industry with international competitive advantage, an important pillar industry to enhance the overall competitiveness of the textile industry, as well as an important part of the strategic emerging industry. According to statistics from the National Bureau of Statistics (NBS), the output of chemical fiber on China mainland was on the rise from 2009 to 2019.From the perspective of the changes in output, the annual output growth rate from 2009 to 2015 basically remained around 8%, while the annual output growth rate from 2016 to 2019 dropped significantly, with the compound output growth rate less than 1%. To sum up, after 2016, China's chemical fiber output grows slowly, and the development of chemical fiber industry enters the adjustment period.

Although the pandemic has affected the development of China's chemical fiber industry, it is also the time for us to pay attention to the development bottleneck of China's chemical fiber industry. In general, the average capacity utilization rate of chemical fiber manufacturing industry is higher than that of industrial and manufacturing industries.However, by comparing the previous cumulative data of capacity utilization rate of chemical fiber manufacturing industry, it was found that the capacity utilization level of 2019 decreased and capacity utilization rate of each quarter decreased. It is worth noting that the utilization rate of production capacity has decreased, but the output still keeps increasing, which indicates that Chinese chemical fiber enterprises are blindly expanding production capacity in the case of overcapacity already.

China's chemical fiber industry still faces many challenges. Te production technology of conventional chemical fiber products ranks among the world's advanced levels.However, due to structural overcapacity, the profitability of the industry is declining. Te independent innovation ability of the industry is weak, and the proportion of products with high added value and high technological content is low, which cannot well adapt to the upgrading demands of functional, green, differentiated and personalized consumption. In addition, high cost and unstable quality of high performance fiber make it difficult to meet the development needs of aerospace and other fields.