China's PFY exports to Pakistan outperform in March

According to the latest data from China Customs, PFY exports were at 275.5kt in Mar 2022, up 25.2% on the month and down 25.8% on the year. PFY exports totaled 780.6kt in Jan-Mar, 2022, down 13.5% over the same period of last year.

The YOY and MOM change of Mar PFY exports could not reflect the actual performance correctly, while the comparison analysis of monthly PFY export in 2021 may incarnate the situation more objectively. Monthly PFY exports were at 249.7kt in 2021, and the Mar PFY export in 2022 rose by 10.3% compared with it and apparently higher than the yearly growth rate estimated at 5.1%.

Greatly falling exports of POY and FDY were the major reason for substantially decreasing PFY export in Mar on the year. Mar exports of POY declined by around 60% y-o-y and those of FDY dropped by more than 30% over the same period of last year, with reduction mainly due to sharply falling exports to India. Compared with exports in Feb, exports of FDY in Mar tended to apparently rise while those of POY increase slowly.

Among the top 10 export destinations in Mar, only exports to Pakistan saw a positive growth. Demand from Pakistan boomed in 2022, with exports of China-made PFY to Pakistan hitting historic high at 85.8kt in Q1 2022, a year-on-year increase of 19.8%. Exports of PFY to Pakistan were mainly DTY, with some FDY. Exports of PFY to India plunged on the year in Mar, while inquiries and orders from India started growing from Mar and there were many orders placed in Apr. Therefore, PFY exports to India is likely to advance on the month in Apr.

Exports of PFY were obviously blocked in Apr as the logistics were stifled amid worse spread of pandemic in some regions of China, especially substantially declining operation efficiency at Shanghai port on COVID restriction. Many containers were congested at Shanghai port as a result. Some cargos were transferred to Ningbo port while queuing was serious with massive quantity. Recently, the logistics congestion has been eased but the delivery at ports still saw low efficiency. Some shipment is still delayed. Therefore, PFY export is expected to apparently fall on the month in Apr.

Actually, many export orders were place in Apr. Many orders were from Indian and Pakistan buyers recently according to the survey made by CCFGroup, with relatively lower price, which indicated that export enjoys potential. However, only some orders will be delivered before May and most will be delayed into May. PFY exports are still likely to reduce in Apr.

In terms of container marine field, many shipping companies including COSCO, ONE, Evergreen, Yangming and HMM have recently announced that they will increase the GRI for trans-Pacific routes from Asia to the United States. The price adjustment will be based on a surcharge of US$1000-2000 per FEU (40-foot standard cabinet), which is estimated to be equivalent to 10-20% of the freight increase. 

However, little PFY exports are under this route. According to the data collected by CCFGroup, the freight of major routes for PFY exports was stable. The freight from major China ports to Bangladesh/Chittagong was at US$5,500/40HQ, that to Indonesia/Jakarta was near US$2,200/40HQ, and that to Pakistan/Karachi was around US$3,500/40HQ. As for whether the freight will increase in May, most customers think it will depend on the actual shipment. Only when the shipping volume is large will the freight climb up.