China's PFY exports to India decline notably in Jan-Feb

PFY export amounted to 505.1kt in Jan-Feb, 2022, a year-on-tear decrease of 4.9%. PFY exports totaled 285.1kt in Jan 2022, down by 2.7% on the year but up by 9.5% on the month. PFY exports amounted to 220kt in Feb 2022, down by 7.7% on the year and 22.8% on the month respectively.

By convention, the delivery will be intensive in Jan as some overseas customers will purchase raw material in advance with the coming of Lunar Chinese New Year holiday. However, in Feb, delivery of export orders will apparently decline as transportation will be in stagnation impacted by the Lunar New Year holiday. 2022 eyed similar performance. However, PFY export still reached 220kt in Feb when companies resumed operation relatively later, apparently exceeding market expectation.

PFY exports did not change much on annual basis in Jan-Feb, 2022, while the performance of different varieties obviously differed, especially POY with export volume of Jan and Feb both down 40% on the year. Exports of FDY decreased by 0.4% and 24.6% on the year in Jan and Feb respectively. Falling exports of POY and FDY were related with India and it will be analyzed in the following part. Exports of DTY and PIY were relatively better.

Decreasing PFY exports were mainly because of falling exports to India.

Exports of PFY to India reduced by 57.4% and 81.8% on annual basis respectively in Jan and Feb, with total exports of Jan-Feb down by 54.5kt. Exports of PFY could see positive growth in Jan and Feb if eliminating the losses to India. Exports of PFY to Pakistan and Indonesia improved in Jan-Feb, offsetting partial reduction of India.

Remark: covering Hs code 54023310, 54024600 and 54024700 

In the first quarter of 2021, local demand recovered in India with eased spread of pandemic, but supply and demand was unbalanced in India. Importing PFY from China became the best choice. Meanwhile, India suspended levying anti-dumping duty on PFY originated from China provisionally. Under such circumstance, exports of China-made PFY to India surged but it decreased rapidly later after local supply recovered and the spread of pandemic worsened again in India. Exports of China-made PFY to India is expected to reduce in 2022 too, with decrement estimated at 100-150kt.

As for the sea freight, export orders were worse than anticipated. Supply of containers was excessive. The sea freight kept falling. Reflected by some traders, the freight to Bangladesh/Chittagong was at US$5,500-5,700/40HQ, down by US$2,000-2,500 compared with the beginning of 2022. The freight to Indonesia/Jakarta was near US$2,200-2,400/40HQ, down US$1,500-1,800 over the level at the beginning of 2022 and that to Pakistan/Karachi was around US$4,600/40HQ, down by US$2,000-3,000 over early-2022. Exports may remain not good in short run. The freight is estimated to drop slowly recently as it has plunged before.