Analysis and prospect of China’s chemical fiber industry

Edited by Zhao Xinhua

In 2021,the global economy gradually recovered,and China’s economy also achieved sustained growth,the growth rate ranking among the highest in the world.The internal and external demand for China’s textile and garment has picked up,and the advantages of the complete industrial system have been fully brought into play.China’s chemical fiber industry is developing in the background of the dual circulation,consumption upgrading,dual control of energy consumption policy,industrial security,etc.,the industry operation showed gratifying characteristics:benefits from the deepening of the supply-side structural reform,the industry supply and demand pattern improved;with the integrated development of refining and chemical industry,the supporting industrial chain is more perfect,and the profit distribution of industrial chain is more balanced.The competitiveness and anti-risk ability of the leading enterprises of integration are significantly enhanced;the development of industrial products continues to be strengthened,product differentiation and high quality has been able to meet the domestic and international market demand...

In 2021,China’s chemical fiber industry entered the post-pandemic recovery stage,showing overall price increase,profit increase and stable inventory,realizing a good start of the 14th Five-Year Plan.However,as the low base effect gradually weakens in 2020,the growth momentum of the industry gradually slows down,and the growth rate of the main economic operation indicators shows an obvious downward trend.

Basic operation situation of chemical fiber industry in 2021

Production

In 2021,the output of chemical fiber was 65.24 million tons,up 8.29 percent year-on-year (Table 1).Of which,except for the output of viscose filament and acrylic fiber decreased by 2.42 percent and 11.87 percent respectively,the output of other major products has achieved positive growth,especially polyester filament with 10.77 percent year-on-year growth and spandex with 10.08 percent year-on-year growth.

Import and export

In 2021,the international trade of chemical fiber industry basically returned to normal,and the import and export of chemical fiber products showed a growing trend.The import of chemical fiber was 834,500 tons,up 9.92 percent year-on-year,but still down 9.10 percent compared to 2019.Except for imports of polyester staple fiber,which decreased by 12.68 percent yearon-year,imports of other major products all increased year-on-year (Table 2).The export of chemical fiber was 5,199,100 tons,up 11.55 percent year-on-year,returning to the pre-pandemic level of 2019.Of which,except for exports of viscose staple fiber and acrylic fiber decreased 13.16 percent and 26.98 percent,exports of other major products are positive growth.

Data source:China Customs

Market

In 2021,with the cost support and improved demand,the overall price center of the chemical fiber market returned to the pre-pandemic level (Figure 1-5).Although the market price of polyester showed a fluctuating upward trend,the increase rate was not as high as that of raw materials.Compared with the beginning of the year,the PTA increased by 34 percent at the end of December,while polyester filament (POY) and polyester staple fiber increased by 21 percent and 17 percent respectively.CPL increased by 22 percent,nylon (POY)increased by 18 percent.The market price of viscose staple fiber reached its peak in early March,and then fell significantly.It was about 11,800 yuan/ton in late September,basically falling back to the level at the beginning of the year.Although it rose slightly in the fourth quarter and soon fell back,and by the end of December,the price was basically at 12,000 yuan/ton.The market price of spandex rose increased most obviously.40D products rose rapidly from 39,000 yuan/ton at the beginning of the year to 65,000 yuan/ton at the beginning of March,and then to 80,000 yuan/ton at the beginning of August,although it fell slightly,the overall price remained at about 75,000 yuan/ton.

There are two main reasons for the increase of spandex.From the point of cost,PTMEG is the main raw material of spandex,accounting for about 80 percent of the raw material consumption of spandex.Another application field of its raw material BDO,PBAT (a degradable material),has seen a substantial increase in demand due to the favorable policy of ban on free plastic bags,resulting in a sharp increase in the price of BDO,and thus promoting the price of PTMEG and spandex.From the demand side,with the technical progress and product development of spandex industry,spandex is not only a kind of elastic material,but also can bring about the change of fabric style,and the application scenario and usage have been greatly increased.As a consequence of the COVID-19 pandemic,the demand for home wear,sportswear,elastic fabrics and medical spandex has increased,and the content of spandex in some fabrics has increased.Spandex has become a major raw material in textile products.For example,the content of spandex in some yoga sportswear fabrics increased from 10 percent-20 percent to 15 percent-25 percent,and even some sports underwear fabrics have a spandex content of more than 50 percent,surpassing the polyamide.Demand for spandex for masks and protective clothing is also high during the pandemic.

Figure 1 Price trend of polyester and its raw materials from 2020 to 2021

Figure 2 Price trend of nylon and its raw materials from 2020 to 2021

Figure 3 Price trend of acrylic fiber and its raw materials from 2020 to 2021

Figure 4 Price trend of spandex and its raw materials from 2020 to 2021

Figure 5 Price trend of viscose staple fiber and its raw materials from 2020 to 2021

Figure 6 Change of profit margin of chemical fiber industry from 2008 to 2021

Operation quality and efficiency

In 2021,the economic benefits of chemical fiber industry increased substantially compared with the same period last year.Data from the National Bureau of Statistics showed that the operating revenue of the chemical fiber industry for the first time into trillion yuan,reaching 1,026.283 billion yuan,an increase of 27.83 percent year-on-year.The total profit reached 62.89 billion yuan,with a year-on-year increase of 149.19 percent.The chemical fiber industry contributed nearly 25 percent of the profit of the textile industry.The percentage of loss-making enterprises was 17.3 percent,11.42 percentage points narrower than that of 2020,and the loss of lossmaking enterprises was 8.84 percent lower than that of 2020 (Table 3).

The total profit growth rate of the chemical fiber industry was the highest in the textile industry chain,with an average growth rate of 45.5 percent in the past two years,significantly higher than the prepandemic level.By industry,polyester and spandex sectors contributed 40 percent and 22 percent of the total profit of chemical fiber respectively.In addition,the technical level of carbon fiber industry is improved after more than ten years of accumulation.In 2021,the production and sales of domestic carbon fiber exceeded 10,000 tons,and the industry achieved profits.

In 2021,the operation of chemical fiber industry was gradually recovered,and the operation quality index was significantly improved compared with that in 2020 (Table 4).The profitability was greatly improved.The profit margin of operating revenue was 6.13 percent,up 2.83 percentage points year-onyear,the second highest point since the 2008 economic crisis (Figure 6).The growth rate of operating revenue increased by 38.24 percentage points yearon-year.Compared with the same period in 2020,the operating capacity has improved.Except for the turnover of finished products,the receivable turnover,current assets turnover and total assets turnover have increased year-on-year.The ratio of thethree expenses all decreased year-on-year,among which the management expenses decreased 0.31 percentage points year-onyear.

Table 3 Economic benefits of chemical fiber and related industries in 2021

Investment in fixed assets

The improvement of business efficiency drives the gradual recovery of investment confidence.According to the data of the National Bureau of Statistics,the fixed asset investment in chemical fiber industry increased by 31.8 percent year-on-year in 2021 (Figure 7).Industrial enterprises have actively invested in upgrading technology and equipment,extending industrial chains and adjusting regional distribution.The average growth rate of fixed asset investment in the past two years was 3.1 percent,and the scale of investment has exceeded the pre-pandemic level.

Prospect of chemical fiber industry operation in 2022

In 2022,global economic growth is expected to slow down,the international political and economic pattern is evolving at an accelerated pace,the growth of external demand may slow down,domestic consumption will still face many difficulties in recovering,and the downward pressure on the economy will increase.However,the fundamentals of China’s strong resilienceand long-term sound economic development will not change.

Table 4 Operation quality of chemical fiber industry in 2021

Figure 7 Change of fixed asset investment growth rate in chemical fiber industry from 2008 to 2021

In the first quarter,chemical fiber industry has encountered difficulties.Due to the impact of COVID-19,local logistics in areas where the chemical fiber industry is concentrated are blocked,downstream demand is depressed,and international oil prices continue to rise.Chemical fiber costs remain high and cannot be smoothly transmitted to the downstream.As a result,the operation rate of the chemical fiber industry has decreased,and economic benefits have shrunk significantly.Looking forward to the whole year,the operating pressure and risk of chemical fiber industry increased.On the supply side,with the improvement of industrial integration and the growth of refining and chemical production capacity,downstream supporting projects continue to greatly expand production,so raw materials and chemical fibers are still in the capacity expansion period.From the perspective of the terminal market,China’s textile and apparel market is expected to decrease,domestic sales may maintain a slow and stable growth,and external demand will gradually decline due to“weak demand,high base,order outflow”.Therefore,the supply and demand pattern of chemical fiber industry is expected to weaken in 2022,while the “dual control of energy consumption” policy may exist for a long time,and the overall operating rate of the industry is expected to be basically maintained or slightly lower.Crude oil wide shock and trend of uncertainty,will increase the risk of chemical fibermarket.In addition,the high base in 2021 has a restraining effect on the growth rate of various indicators in the chemical fiber industry in 2022.

The year 2022 is an important year for the implementation of the 14th Five-Year Plan.With the adjustment of policies and the transformation of economic structure,the contribution of scientific and technological innovation to the economy will gradually increase,and the “Specialized,Refinement,Differential and Innovation” will also develop rapidly.Chemical fiber enterprises should grasp this development opportunity,continue to strengthen independent innovation and enhance their core competitiveness.Meanwhile,the chemical fiber companies will adhere to the road of green and sustainable development,vigorously promote energy conservation and carbon reduction technology popularization and application,actively promote clean production,carry out green plant,green products,green supply chain construction,strengthen the comprehensive utilization of waste resources,and speed up low-carbon transformation and industrial development.