VFY export of China in Feb reaches a decade high

VFY export of China in Feb 2021 hits a decade high of 8.344kt, which is even twice as much as that of some months. The similar situation also exists in the export of other products, which is partially attributed by compensatory release of downstream demand in overseas market amid greater influence of the COVID-19 pandemic in the second half of 2020. Moreover, the sharp increase in commodities and inflation expectation at the end of 2020 has led to surge in speculative stocking demand of various industries. Market participants also show higher expectation towards the recovery in 2021.
 

The export of VFY is synchronized with that of textile industry. Although price has fallen below $5,000/mt, it is still a market that is more worthy of attention and expectation versus domestic sales. In Feb, India alone accounts for half of the trade volume and Pakistan takes up 35% of exports, with the two totaling about 84%, representing high export concentration.
 

In terms of origins, Xinxiang Chemical Fiber occupies more than half of the share in the two markets and the percentage of Yibin Grace is relatively even. Jilin Chemical Fiber is more focused on the Indian market, and Hubei Golden Ring may exports to Pakistan.
 

VFY inventory is still at a historical high level due to stockpiles accumulated in the past years, but Chinese market has been mild all year round, so more efforts should be put on overseas market in order to reduce the inventory.