Output of Polyester Fiber Grows Rapidly

By Zheng Junlin   

Rapid capacity growth

The polyester fiber industry in China has grown rapidly in recent
years. The capacity reached 15.76 million t/a in 2005 and the
output was 12.701 million tons, an increase of 11.6% over 2004.
The output growth was greatly slowed down. The average annual
growth of the capacity was 22.8% and the average annual growth
of the output was 19.9% from 2000 to 2005. The proportion of the
polyester fiber output in the total output of chemical fibers
increased from 73.5% in 2000 to 78.8% in 2005. Both the capacity
and the output of polyester fiber in China accounted for more
than 50% of the world total.
   The most outstanding achievement in the industrial
readjustment conducted in recent years is the expansion of the
production scale. In 2005, there were 10 polyester fiber
producers with a capacity of over 400 thousand t/a in China.
Their total capacity was 5.65 million t/a, accounting for 35.8%
of the national total. There were 55 polyester fiber producers
with a capacity of over 100 thousand t/a. Their total capacity
was 13.67 million t/a, accounting for 86.8% of the national total.
These companies are the main domestic participants in the
international market competition.

Enhancing industrial competitive edge

The Tenth Five-year Plan period (2001-2005) was the years with
the most rapid development of polyester fiber technologies in
China. The scale of polyester filament fiber plants was
increased from 5 thousand-20 thousand t/a to 60 thousand-200
thousand t/a, the investment per unit of capacity reduced
drastically and the product quality improved remarkably.
   The upgrading in the technical level brought about the
enhancement in industrial competitive edge. It was mainly
manifested in the following 3 aspects. (1) The import amount of
polyester fiber reduced rapidly and the export amount increased
drastically. The net import amount was 800 thousand tons in 2002,
594 thousand tons in 2004 and was reduced to 172 thousand tons
in 2005. The export amount was 329 thousand tons and the net
export amount was 66.5 thousand tons in the first half of 2006.
(2) The export of downstream fabrics grew rapidly. Take fabrics
made of polyester filament fiber for instance. The export amount
was 847 thousand tons in 2005, an increase of 124% over 2002.
The average export price was RMB4 609 per ton, an increase of
5.11% over 2002. (3) The rate of differential products increased
remarkably. The rate of differential chemical fibers was 31% in
2005 and the rate for polyester filament fiber reached as high
as 35%.

Great price fluctuation and narrow margin

The market price of polyester fiber had two great fluctuations,
one in the second half of 2004 and the other during March-April
2005. It increased drastically from June 2006 to the beginning
of September 2006. The market price fluctuation and the narrow
margin have led to fiercer market competition and also promoted
the development and application of new products and new
technologies. In a basic balance between supply and demand, the
price fluctuation of raw materials is the root cause for the
price change of downstream products.
   The output of polyester fiber has increased rapidly. The
margin is however an entirely different matter. The profit
reached RMB629 per ton in 1999 and RMB905 per ton in 2000. It
reduced drastically afterwards and has basically been
maintained at around RMB200 per ton in recent years.

Output growth slowdown

The demand of polyester fiber in the downstream textile sector
and non-fiber sectors will still be brisk for a considerable
period of time in future. The polyester fiber industry will
therefore maintain a relatively rapid development. The growth
will however drop drastically. The average annual growth of the
output is expected to be 8%-10% during the Eleventh Five-year
Program period (2006-2010).
   With the impact from antidumping activities, the export of
textiles in China is getting more and more difficult in recent
years. The situation is expected to be more severe in future.
Squeezed by the harsh status of the textile sector, the
competition between polyester fiber producers will become
fiercer. Medium and small companies without advantages will be
merged or beaten out.
   The next 5-10 years will be a key period for the development
of the polyester fiber industry. Challenges and opportunities
will exist side by side. With the rehabilitation of the world
economy and the rapid development of the Chinese economy, the
polyester fiber industry in China will maintain a relatively
rapid development.

Consumption Projection of Polyester Fiber
                               in China
         (thousand tons)
Variety         2005    2010    Average annual growth
                                during 2005-2010 (%)
Polyester fiber    12 870    18 500    7.5
Filament fiber    7 870    11 000    7.2
Staple fiber    5 000    7 500    8.5
Source: CNCIC