Prospects of China’s chemical fiber industry in 2021

by Zhao Xinhua

The difficult year 2020 has passed. Looking forward to 2021， the gradual economic recovery will provide a guarantee for the sustained recovery and steady development of the chemical fiber industry.

In 2020， Chinas output of chemical fiber was 60.25 million tons， up 3.4 percent year-on-year. Among them， the output of polyester was 49.23 million tons， up 3.9 percent year-on-year； the output of nylon was 3.84 million tons， up 3.9 percent year-on-year； the output of viscose staple fiber was 3.79 million tons， down 3.8 percent yearon-year； the output of spandex was 830，000 tons， up 14.4 percent year-on-year. In 2020， the operating income of the chemical fiber industry reached 798.42 billion yuan， down 10.4 percent year-on-year； total profit was 26.348 billion yuan， down 15.1 percent year-on-year； in 2020， the export of chemical fiber products reached 4.66 million tons， down 7.92 percent year-on-year.

From the demand side， China and the global textile industry production will continue to consolidate and restore the growth trend， Chinas textile and apparel exports will continue to maintain the growth momentum， the domestic consumer market will continue to rebound， which will provide the growth power for the chemical fiber industry.

From the raw material side， with the gradual recovery of the world economy， it is expected that the price center of the international oil price in 2021 will be significantly higher than that in 2020， and the price of the chemical fiber market will have certain support in the cost side. However， as oil prices continue to rise， global oil production is likely to increase， which will limit the rise in international oil prices. In addition， in 2021， Chinas polyester raw materials PX， PTA and MEG will still be in a high production expansion cycle， the domestic supply shortage of PX and MEG will be alleviated， and the supply of PTA will remain loose， which will provide some hedging against cost support from higher oil prices， and the profits of the industrial chain will be transferred from the raw material end to the back.

From the perspective of the new capacity of the industry， 2021 is still the period when the production capacity of the chemical fiber industry， especially polyester， is put into centralized production. The production capacity contradiction will be highlighted periodically. It remains to be seen whether the demand growth can effectively absorb the growth of production capacity. Moreover， most of the new production capacity is concentrated in the leading chemical fiber enterprises， which will further consolidate the cost advantage of the leading enterprises in scale and intensify the crowding out effect on other enterprises to a certain extent.

Overall， chemical fiber industry will continue to be in a recovery cycle in 2021， but the process will not be smooth， market volatility may increase. It is expected that the operating indicators such as chemical fiber output and economic benefit will be significantly better than that in 2020. However， due to the low base in the first half of 2020 and continuous recovery in the second half of the year， the growth rate of various indicators of the industry in 2021 will show an obvious trend of high before and low after. Exports are expected to return to growth as the risk of a global pandemic is decreasing， demand in the textile and apparel market is picking up， and international logistics is recovering quickly.

In the long run， the pandemic will accelerate the structural adjustment of Chinas chemical fiber industry， further promote the supply-side structural reform of the industry， and prompt enterprises to think about how to layout and develop in the future. In the post-pandemic era， “innovation， safety and environmental protection” will become the focus of the industry. Strengthen independent innovation， integration of new materials， new technology and the trend of domestic consumption upgrading， constantly improve product quality and value-added of science and technology， explore new demand， meanwhile， to improve the level of intelligent manufacturing， through the implementation of intelligent manufacturing， integration of industrial chain data resources， to achieve the “Internet of everything”； meanwhile， industrial safety can not be ignored. Chemical fiber raw materials are highly dependent on petroleum resources， and regenerated cellulose fiber raw materials are highly dependent on imports， which all have industrial safety risks. In the field of environmental protection， China has put forward the goal of “reaching the peak of carbon emissions before 2030 and striving to achieve carbon neutrality before 2060”， which will further promote and accelerate the pace of green transformation and upgrading of the chemical fiber industry.