VFY export of China posts a 13% y-o-y decline in 2023

According to customs data, VFY (H.S. code: 54033190) export of China in Dec of 2023 increased by 19.58% month on month but decreased by 14.51% year on year to 8.12kt. In Jan-Dec, the cumulative export volume decreased by 12.64% on the year to 90.1kt, with an average monthly volume of 7.5kt throughout the year, comparing to 8.6kt in 2022. The export price in 2023 averaged at $5,698/mt, which was largely flat with that of 2022 at $5,652/mt, but there were more fluctuations in 2023.

India and Pakistan are still the top two destinations of China's VFY export, accounting for 77% of total in 2023. As for origins, Xinxiang Chemical Fiber, Jilin Chemical Fiber and Yibin Grace are the major exporters in China, taking up 92% of the total volume.

There is better performance of VFY price and profit, and the inventory burden of VFY companies is tolerable. Moreover, the demand both at home and abroad is expected to be largely stable, so VFY companies may show higher enthusiasm for production by running the units with high operating rates. In addition, new units will be put into operation, which will promote the enterprises to keep exploring the export market, but considering the consumption downgrade trend resulting from the global economic situation, whether the monthly export volume can recover to 10kt needs further observation. Therefore, the export of VFY in 2024 is estimated to be around 98kt.

Considering the cyclical fluctuation in the stocking up and procurement by downstream sector, the overall demand in China local demand is expected to be generally stable in 2024, but the export orders of some fabrics may be affected by the influence of tariffs, while the direct export of VFY is still anticipated to recover.