China's PFY export may embrace small peak amid delayed BIS certification

In Jun, with the approaching of BIS certification implementation, Indian market was quiet. Although there has been rumors on the delay of certification implementation, most market players were cautious when there was no confirmed notice from official. The export delivery and placement of orders both apparently decreased. According to the data from China customs, exports of PFY amounted to 339.2kt in Jun, 2023, down by 6.2% on the month, and most reduction was from Indian market.  

On Jul 17, Indian government announced that the BIS certification of polyester FDY (IS 17261:2019), POY (IS 17262:2019) and PSY (IS 17265:2019) in India has been postponed to October 5, 2023. After this news landed, quiet Indian market became lively again. Inquiries from Indian players emerged intensively and export orders of PFY to India could be described as very hot. It was even heard that more than 3000 containers of PFY orders were placed last week from Indian buyers, with volume above 70kt, while it was not been confirmed temporarily.

In addition, most orders from India were required to be delivered before the second half of Aug. In the first half of 2023, the BIS certification was expected to start in Jul. Under such circumstance, the PFY exports hit yearly high in May but apparently decreased in Jun. Therefore, the PFY exports are likely to welcome a small peak from H2 Jul to H2 Aug.

Indian buyers mainly purchased polyester POY and FDY from China. Therefore, the stimulus to small-and-medium sized companies and traders would be limited. Orders will be concentrated in top leading companies. In addition, except for POY and FDY, inquiries for PET fiber chip also appeared, with volume at 1000-3000 tons, but the price was apparently deviated from local China market. That meant actual transactions may be hard to be concluded. CCFGroup will have following-up trace on it.

Remark: the freight of different ships and forwarders differs, and the above freight is only for reference.

PFY export market also faced some problem came from Indian market, and the sea freight was the first problem. The sea freight from Ningbo to India started rising from early-May, hiked to yearly high in mid-Jun and started falling thereafter. The freight from Ningbo to India/Nhava Sheva increased to US$1000/40HQ last week, which shows signals to surge as many orders will be delivered intensively and may even climb up to around US$3000/40HQ in Aug. With high freight, factories meet resistance in taking orders. Some orders have not been confirmed due to the transportation cost issue. The sustainability of orders needs further observation.

In general, PFY export market was weak in early-Jul. Although orders from India surged in the second half of Jul, some orders will be delivered in Aug. Therefore, PFY exports may rise limitedly in Jul but are likely to increase to yearly high in Aug.