China's PFY exports close to historic high in August

PFY exports were close to historic high in Aug 2023 stimulated by intensive delivery of orders to India. PFY exports amounted to 371.1kt in Aug 2023, up by 21.62% or 66kt on the month and 45.55% on the year respectively. Among this, exports to India reached 80.9kt, up by 68.5kt or 552% on the month. The highest PFY exports in history were at 371.15kt in Mar 2021.

PFY exports are estimated to apparently decline after orders to India being delivered successively in Sep. According to rough estimate, PFY exports to India may reduce by 50-60kt over Aug in Sep. Exports of DTY were good in Sep, especially DTY75D, which may offset partial reduction to India. Therefore, PFY exports are temporarily expected to fall to around 330kt in Sep.

The increase of PFY exports in Aug was mainly contributed by POY and FDY, which rose by 36kt and 26kt respectively on the month, hitting single-month high in history. Exports of POY to India approached 46kt, up by 42kt on the month. Exports of FDY were at 29kt in Aug, a month-on-month increase of 24kt. Exports of FDY to India surged while those to other nations/regions were lower than Jul.

The BIS certification of India will be implemented from Oct 5 and there is no new progress by now. Many market players expect it will not be extended again. Therefore, many hold expectation toward PFY exports in Nov. In Jan-Aug, 2023, PFY exports to India have been 403kt, far higher than the total export of 306kt throughout 2022. Even if the BIS certification is extended again, it may have weaker stimulus on PFY exports.

On Sep 12, 2023, Indonesia launched an anti-dumping investigation against Chinese synthetic filament yarns. The Indonesian tariff numbers of the products involved are 5402.33.10, 5402.33.90, 5402.46.10 and 5402.46.90. This is also the first time that Indonesia has launched an anti-dumping investigation against China's polyester filament. As one of the few growth points of PFY exports in recent years, if Indonesia's anti-dumping is established, it will curb the expansion of China's PFY exports.

PFY exports to India obviously grew in Aug but the sea freight did not hike as expected. According to the data collected by CCFGroup, the freight from Ningbo to India/Nhava Sheva started rising from early-Aug, surged to around US$1400/40HQ near end-Aug and decreased again in H1 Sep, with the highest increment only around $400.

The freight rate of Indian and Pakistani route was stable, that of South American route substantially fell and that of Southeast Asian route extended higher (especially Indonesian route). The freight from Ningbo to Pakistan/Karachi was still at US$1200/40HQ, that to Egypt/SOK was stabilized at US$1700/40HQ, that to Peru/Callao decreased to US$1750/40HQ, that to Brazil/NAV fell to US$2000/40HQ and that to Indonesia/Jakarta increased to US$800/40HQ, which may extend higher later.

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

As for the fourth quarter, players hold modest expectation toward PFY exports in Oct but still have some anticipation toward Nov and Dec. If the BIS certification is extended again in India, PFY exports may apparently grow in Nov. In addition, as player expect overseas customers to replenish in year end, they hold expectation toward PFY exports in Dec. The total PFY exports are expected to be around 4 million tons throughout 2023, a year-on-year increase of 21%.