Industry Data: Focus On The Operation Analysis And Future Trend Development Of China'S Chemical Fiber Industry Last Year

2024 is a key year to achieve the goals and tasks of the 14th Five Year Plan, and also a key year to determine the overall goal of further comprehensively deepening reform. This year, China's economic operation was generally stable, making progress while maintaining stability, high-quality development was solidly promoted, and Chinese style modernization took new and solid steps. In this context, the chemical fiber industry shows a recovery growth trend, and the main operating indicators have achieved positive changes. Among them, the average starting load of the industry is at a high level, and the output grows rapidly; In the face of increased export pressure, chemical fiber enterprises actively expand the international market, and the export volume has achieved positive growth; The economic benefits increased year on year, the annual revenue remained above 1 trillion yuan, and the operation quality improved.

1、 Basic situation of chemical fiber industry operation in 2024

（1） The load is relatively high, and the output increases rapidly

In 2024, the average starting load of the chemical fiber industry will be at a high level, which is higher than that in 2023. In particular, the average starting load of polyester direct spinning filament and nylon civil filament will be more than 90%, respectively 7.8 and 8.8 percentage points higher than that in 2023. Phased view: from March to April, downstream demand was better than expected, and most chemical fiber sub industry loads were at a high level in the same period in recent years; However, the high start up resulted in the accumulation of inventory and the narrowing of benefits. After the off-season, the demand became weaker, and some polyester polyester enterprises even suffered losses. From June to August, the starting load of polyester polyester fell slightly; In September, the downstream startup rate increased, driving the chemical fiber industry's starting load to rise slightly; In the fourth quarter, it continued to operate at a high level.

In the case of high production base and high operation, the output of chemical fiber will grow rapidly in 2024. According to the statistics of China Chemical Fiber Association, the output of chemical fiber in 2024 will be 74.75 million tons, with a year-on-year growth of 8.8% (Table 1). Among them, the output of polyester filament and spandex increased by about 10%, nylon by 6.3%, viscose staple fiber by 5.8%, and Lyocell fiber by 27.4% year on year.

Table 1 Completion of China's Chemical Fiber Output in 2024

Note: The above statistics include recycled fiber products, excluding post processing products such as texturing.

Source: China Chemical Fiber Industry Association

　　 （2） Terminal demand has grown, but the pressure appears

In 2024, a package of policies will be introduced in a timely manner, which will effectively boost social confidence, significantly rebound the economy, and drive the domestic demand for textile and clothing goods to achieve moderate growth. According to the data of the National Bureau of Statistics, in 2024, China's per capita clothing consumption expenditure will increase by 2.8% year on year; The total retail sales of clothing, shoes and hats, knitwear and textiles above the designated size increased by 0.3% year on year, 12.6 percentage points lower than that in 2023; The retail sales of online clothing products increased by 1.5% year on year, 9.3 percentage points lower than that in 2023.

In terms of external demand, the competitiveness of China's textile industry chain continued to release, effectively withstood the relatively severe foreign trade situation and achieved positive growth in exports throughout the year. Among them, due to concerns about the risks of Sino US trade environment, some enterprises "scrambled for exports" in the fourth quarter, which led to accelerated export growth in the current quarter. According to Chinese customs data, China's textile and clothing exports will total 301.1 billion US dollars in 2024, up 2.8% year on year. Among them, the textile export volume was USD 141.96 billion, up 5.7% year on year, and the clothing export volume was USD 159.14 billion, up 0.3% year on year. China's textile and clothing exports to major markets are generally good, but the performance is somewhat differentiated. The export to the United States, the European Union, ASEAN and other major trading partners is growing well, while the export to Japan, Turkey, Russia and other markets is growing negatively.

From the perspective of chemical fiber direct downstream, the output of chemical fiber yarn and chemical fiber staple cloth increased by 8.2% and 3.4% respectively year on year; From the perspective of the operating rate of major downstream chemical fiber industries (texturing, looms, polyester yarn), the operating rate has increased compared with 2023, and the texturing operating rate has increased significantly. From the light textile city turnover, the average value is slightly lower than 2023.

　　 （3） The export growth rate was low before and high after, and the growth trend resumed throughout the year

According to Chinese customs data, in 2024, the export of chemical fiber products will total 6.65 million tons, with a year-on-year growth of 2.16% (Table 2), and the growth trend will resume throughout the year. In terms of export destinations, it has a greater impact on India's export reduction. In October 2023, India implemented BIS certification on polyester filament, and enterprises rushed to export before that, which led to a large increase in polyester filament exports in 2023. In 2024, the export of polyester filament failed to continue the high growth trend of the previous year, and the annual export volume decreased by 2.50% year on year. If India is removed, the export of polyester filaments to other countries and regions will actually increase. In addition, the share of chemical fiber export market has changed significantly (Figure 1). The shares of India and Turkey have decreased by 5.6 and 2.6 percentage points respectively, and the shares of Vietnam, Pakistan and Egypt have increased significantly.

Table 2 Import and export of main chemical fiber products in 2024

Source: According to Chinese customs data

Figure 1 Change of China's chemical fiber export market share

　　 （4） The chemical fiber market was relatively stable in the first half of the year, and the cost support weakened in the second half of the year

In 2024, the price of crude oil will fluctuate in the range of 66~87 dollars/barrel (Figure 2). In the first half of the year, the geopolitical disturbance will lead to an upward trend, which will reach the annual high of 87 dollars/barrel in early April; In the second half of the year, the Federal Reserve cut interest rates. The market expected that the economy would decline, demand would weaken, and oil prices would continue to fall. In the first ten days of September, the oil price dropped to an annual low of $66/barrel, and then turned to the "bottoming out" stage.

Source: Chemical Fiber Information Network

Figure 2 Trend of WTI oil price from 2023 to 2024

Although crude oil prices rose in the first half of the year, the correlation between PTA and polyester prices and crude oil prices was slightly weak, market fluctuations were relatively stable, and prices were more affected by the supply and demand game (Figure 3). In the second half of the year, as the crude oil price continued to fall, the cost end support weakened, and the chemical fiber price showed a downward trend. Taking polyester chain as an example, PTA price dropped from 6015 yuan/ton at the beginning of July to 4760 yuan/ton at the end of the year, a decline of 26%; Polyester POY decreased from 8015 yuan/ton at the beginning of July to 7040 yuan/ton at the end of the year, a decrease of 14%.

Source: Chemical Fiber Information Network

Figure 3 Price trend of polyester and its raw materials from 2023 to 2024

　　 （5） The economic benefits increased year on year, and the operation quality improved

In 2024, the economic benefit indicators of the chemical fiber industry will show positive changes. According to the data of the National Bureau of Statistics, the chemical fiber industry realized an operating revenue of 1166.6 billion yuan, up 5.72% year on year; The total profit was 35.8 billion yuan, a year-on-year increase of 33.58%. However, due to the gradual weakening of the low base effect, the profit growth gradually narrowed. The operating income profit margin was 3.07%, which was still at a relatively low level in recent years, but showed an upward trend month on month. The chemical fiber industry contributed about 18.5% of the profits to the whole textile industry, 3.6 percentage points higher than that in 2023; The loss of the industry was 23.12%, 2.4 percentage points lower than that in 2023, and the loss of loss making enterprises was 10.03% lower than that in 2023 (Table 3).

By industry, the profits of polyester, nylon and cellulose fiber industries have significantly improved compared with 2023, contributing 48%, 18% and 23% respectively to the profits of the whole chemical fiber industry. Specifically, there was a certain pressure on the profit level of the polyester industry in the first half of the year. In the second half of the year, with the gradual improvement of poor processing, the profit level increased; The profit level of nylon industry is relatively stable, and the demand in outdoor and sports fields is strong, driving the growth of nylon consumption, thus bringing profit space for the industry; The total profit of the spandex industry declined significantly. On the one hand, the decline in raw material prices was a drag. On the other hand, the new capacity brought supply pressure. The superimposed demand was less than expected. The industry's inventory was at a high level, and product prices showed a downward trend.

Table 3 Economic benefits of chemical fiber and related industries in 2024

Source: National Bureau of Statistics (* The textile industry data in this table is a total of three items)

　　 （6） The growth rate of fixed asset investment rebounded, and the actual new capacity slowed down

According to the data of the National Bureau of Statistics, the investment in fixed assets of the chemical fiber industry will increase by 4.7% year on year in 2024, and - 9.8% in 2023. The investment growth will pick up under the low base effect. However, from the perspective of new capacity, 1.96 million tons of polyester fiber will be invested in 2024, which will ease the pressure on the industry's new capacity. In addition, enterprises in the industry focus more on the high-end, intelligent and green upgrading of the original capacity, and the pace of transformation and upgrading is solid and powerful.

Source: National Bureau of Statistics

Figure 4 Change of fixed asset investment growth in chemical fiber industry from 2008 to 2024

　　 2、 Operation prospect of chemical fiber industry in 2025

In terms of the external environment, the global economy in 2025 will continue to be on a low growth track. In March, the OECD lowered its forecast for world economic growth in 2025 from 3.3% to 3.1%. At the same time, global production and consumption costs are rising, international trade is blocked, the global supply chain is becoming more fragmented, the geopolitical situation is unpredictable, and global economic uncertainty is increasing.

From the perspective of internal environment, the 2025 Government Work Report puts forward the expected goals, including: GDP growth of about 5%; Consumer prices rose by about 2%; The growth of residents' income and economic growth are synchronized. To this end, the government will implement more proactive fiscal policies, moderately loose monetary policies, strengthen the livelihood orientation of macro policies, and expand domestic demand in an all-round way. It can be predicted that the precise macro policies will promote China's economy to become better and better, and the domestic market will also play a more prominent role as a ballast.

It is expected that in 2025, the domestic sales of textiles and clothing will continue to be stable and under pressure, while the export pressure will increase significantly. On the whole, the chemical fiber industry has the foundation to maintain a stable operation, but it still faces problems such as increased competition, greater pressure on enterprise operation, and increased trade friction, which requires the whole industry to continue to work together to deal with. The industry needs to fully stimulate endogenous power, rely on industry self-discipline, technological innovation, product upgrading, industrial transformation and other measures, effectively respond to cost and competitive pressure, and actively promote stable and high-quality operation of the industry.

(Source: China Chemical Fiber Industry Association)