China's PSF exports recover moderately in Jan-Sep, 2022

According to China Customs, PSF exports of China were about 86,700 tons in Sep, 2022 (uncombed or uncarded), an increase of 38.5% year on year and down 1% month on month. In the first three quarters of 2022, PSF exports totaled 746.4kt, up 8.6% year on year, and down 0.1% compared with the same period of 2019.

The export volumes in Jan-Sep 2022 were favorable overall, especially in Aug, which was the highest since 2019. Since the fourth quarter of 2021, PSF exports recovered somewhat, but the recovery was slow in Jan-Feb affected by the Spring Festival holiday. After Mar, exports kept the growth trend. Till Sep, the export volumes were basically the same with the period in 2019.

The rise in the first three quarters of 2022 was mainly attributed to the higher exports to some major export destinations, like Russia, Mexico, India and Brazil. During Jan-Sep, 2022, the exports to Brazil amounted to 40,829 tons, up 35.74% year on year, that to Russia were 31,023 tons, up 42.39% year on year and that to Mexico totaled 20,550 tons, up 55.40% year on year.

In 2022, China PSF supply pressure is relatively large, and plants are active to seek for exports. On the one hand, the epidemic outside China is under normalization, and operating rate of end-users recovers, having higher demand for textiles. On the other hand, the sea freight reduces, favorable for exports.

In the second half year, the exports are hard to keep growing affected by the US Fed's hike on interest rate, higher USD/CNY exchange rate and tight foreign exchange reserve of major PSF export destinations like Southeast Asia and Pakistan. Exports may be high first but low in 2022.