Polyester product exports from China, a major global supplier, have dipped in the first two months of 2024, raising concerns about the industry's health. According to customs data, total exports reached nearly 1.803 million tons, down 18,000 tons year-on-year. This decline is primarily driven by significant drops in polyester filament yarn (PFY) and staple fiber exports, falling 63,000 tons and 26,000 tons respectively.

Reasons for the decline

Several factors might be contributing to the decrease in Chinese polyester exports.

• Weakening global demand: The global economic slowdown and rising inflation in key markets like Europe and the US could be dampening demand for polyester products.

• Shifting production base: The textile industry's migration to Southeast Asian countries like Vietnam could be impacting China's polyester exports as these countries establish their own production capabilities.

• Post-lunar New Year slump: The data might not be fully representative due to seasonal fluctuations. The pre-holiday stocking and bullish market sentiment before the Lunar New Year might have led to inflated expectations, resulting in a post-holiday order cool down.

Impact on global polyester business

The decline in Chinese exports, particularly of filament yarn and staple fiber, could lead to a temporary surplus in the global market, potentially putting downward pressure on prices. While filament yarn and staple fiber exports fell, the story highlights a rise in downstream polyester yarn and woven fabrics exports. This suggests that manufacturers in other countries might be picking up the slack, but the long-term impact remains unclear.

Table: (Jan-Feb 2024 vs. YoY) - Key Products (in thousand tons)

While the initial data shows a decrease in exports, the broader picture remains complex: Despite the decline in filament yarn and staple fiber exports, other segments of the polyester industry chain, like polyester filament woven fabrics, have shown growth . This suggests continued downstream demand for polyester products.

However, further observation is needed to understand the long-term impact on demand. The post-holiday order cool down might be temporary, and the full-year picture could be different.

The future of Chinese polyester exports and the global market depends on several factors. 

• Post-pandemic recovery: The global economic recovery post-pandemic will significantly influence demand for polyester products.

• Geopolitical tensions: Trade tensions or disruptions in raw material supply chains could further impact exports.

• Sustainable practices: Growing consumer preference for sustainable clothing could push the industry towards recycled polyester, potentially impacting demand for virgin polyester.

The initial decline in Chinese polyester exports in 2024 warrants close monitoring. While the reasons for the decline are not entirely clear, a combination of global economic factors, industry shifts, and seasonal fluctuations could be at play. The impact on the global market and the future demand-supply situation remain uncertain and require further analysis.