China Chemical Fiber: Analysis Of Industry Operation Data In The First Quarter Of 2025

In the first quarter of 2025, China's economy ushered in a good start. In the current quarter, GDP (constant price) grew 5.4% year on year, higher than the expected growth target of "about 5.0%". Against this background, the chemical fiber industry continued to grow, with relatively high starting load and year-on-year increase in output, but the output growth slowed down; The price trend fluctuated and declined, and the operating revenue declined year-on-year, but the total profit kept growing; The export performance was relatively bright, and the export growth rate increased under the effect of "striving for export".

　　 01 Basic Information of Industry Operation

　　 （1） The growth rate of output slowed down, and the low level of inventory recovered

In the first quarter, the overall production situation of the chemical fiber industry was good, but the starting load of each sub industry was different. Among them, the starting load of direct spinning polyester filament increased month by month, with an average starting load of 85% in January, 89% in February, 94% in March, and 89% in the first quarter, 1.5 percentage points higher than the same period in 2024; The average starting load of nylon civil filament in the first quarter was 82%, basically the same as that in the same period of 2024; The average operating load of spandex is 79%, 2.8 percentage points lower than that of the same period in 2024. Since April, the Sino US trade conflict has intensified and the external adverse effects have deepened. Affected by the macro environment, the starting load of chemical fiber industry has declined.

In terms of output, according to the data of the National Bureau of Statistics, the output of chemical fiber from January to March 2025 will be 20.63 million tons, an increase of 6.47% year on year, and the growth rate of output will be slower than that of the same period in 2024 and the whole year (Figure 1).

Figure 1 Change in year-on-year growth rate of chemical fiber output since 2024

Data source: National Bureau of Statistics, China Chemical Fiber Industry Association

After the chemical fiber inventory is well depleted at the end of 2024, the inventory level of most sub industries in the first quarter rebounded at a low level (Figure 2). Take polyester filament as an example. After the Spring Festival, downstream devices have been restarted in succession, but mainly to digest the raw materials prepared before the festival. The industry's production and sales continue to be weak, and the factory's inventory accumulates; Since March, the downstream texturing and weaving start up have not been as expected in the peak season. The industry's production and sales are dominated by phased pulse amplification, and the factory inventory has been continuously accumulated. In late April, the price of polyester filament was relatively low. Some downstream companies speculated to stock up and the factory inventory was reduced. By product, in the first quarter, the average inventory of polyester POY was 19 days, basically the same as that in the same period of 2024; The average inventory of nylon is 24 days, 7.6 days higher than that of the same period in 2024; The average inventory of spandex is 49 days, still fluctuating at a high level, and the inventory pressure is high.

Figure 2 Inventory of main chemical fiber varieties since 2024

Data source: Huarui Information

　　 （2） Chemical fiber price trend fluctuates and goes down

Since 2025, under the combined effect of imbalance between supply and demand, geopolitical conflict, weak global economic recovery, changes in tariff policies and rising risk aversion, the price of crude oil has fluctuated downward, and the prices of major chemical fiber products and raw materials have followed a downward trend (Figure 3). By the end of April, crude oil price dropped by 17.38%, PTA price dropped by 6.39%, polyester POY price dropped by 9.13%, polyester staple fiber price dropped by 8.47%, of which PTA price dropped slightly less than crude oil price. From the current price, PTA processing gap has expanded.

Figure 3 International oil prices since 2024 PTA、 Price trend of polyester POY and polyester staple fiber

Source: Huarui Information

Among other sub industries, the decline of nylon industry chain is more obvious (Table 1). Since the middle of February, the CPL price has declined significantly. In addition, the inventory pressure at the polymerization end is high, and the polymerization plant reduces CPL procurement, pushing up the inventory of the CPL plant. Under the pressure of inventory, the price of CPL keeps falling. By the end of April, the price of CPL had dropped by 14.26%. The downward trend of price is transmitted level by level. In addition, there is inventory pressure in all links of the industrial chain. By the end of April, the price of nylon POY fell by 11.27%.

Table 1 Price changes of main chemical fiber products and raw materials since 2025

Source: Huarui Information

　　 （3） Under the effect of "striving for export", export growth increased

According to the statistics of China Customs, the total export volume of main chemical fiber products from January to March was 1.61 million tons, with a year-on-year growth of 12.57%, 21 percentage points higher than that of the same period in 2024 (Table 2). Among them, the export of polyester staple fiber increased by 32.01% year on year, and the export volume to Vietnam, Pakistan and Brazil accounted for the top three, with year-on-year growth of 16.52%, 84.55% and 73.08% respectively.

Table 2 Information on import and export of main chemical fiber products from January to March 2025

Source: China Customs

　　 （4） The terminal domestic sales grow moderately, while the export sales release resilience under pressure

In the first quarter, supported by the overall stable domestic macroeconomic situation, the policy of trade in of old consumer goods across the country and the Spring Festival consumer holiday, the domestic sales of textiles and clothing generally achieved moderate growth. According to the data of the National Bureau of Statistics, in the first quarter, the per capita spending on clothing increased by 1.2% year on year; The retail sales of clothing, shoes and hats, knitwear and textiles above the designated size increased by 3.4% year on year, 0.9 percentage points higher than the same period in 2024. However, due to the fact that the demand for clothing consumption of residents has yet to be released and the relatively high base of textile and clothing e-commerce retail scale, the growth rate of online retail fluctuated slightly. In the first quarter, the retail sales of online clothing products nationwide slightly decreased by 0.1% year on year. The consumption of Guofeng Guochao, outdoor sports, and textile and clothing products with a high degree of correlation with the "national subsidy" policy has shown a remarkable performance. The market information shows that since this year, the sales of Guochao clothing and outdoor shoes and clothing represented by the new Chinese style have increased by 120% and 50% respectively year on year.

In terms of export, according to the data of China Customs Express, the total export volume of China's textiles and clothing in the first quarter was 66.28 billion US dollars, up 1% year on year, and the export scale was at a high level in the same period of history. China's chemical staple fiber, textile yarn and other major intermediates still maintained a good growth momentum, playing a supporting role in linking the upstream and downstream of the global textile industry chain and ensuring the stable operation of the international supply chain, driving the textile export volume to 33.27 billion dollars in the first quarter, up 4% year on year; However, affected by weak overseas terminal demand, clothing exports are under great pressure. In the first quarter, the export volume was US $33.01 billion, a year-on-year decrease of 1.9%. China's textile foreign trade enterprises actively build a diversified international market, continue to deepen international supply chain cooperation, and superimpose the "export competition" effect. In the first quarter, China's textile and clothing exports to the United States, the European Union, Japan, Africa, Turkey, Bangladesh and other trade partners maintained a good growth trend, injecting strength into the stability of global textile and clothing trade cooperation.

　　 （5） Profit keeps growing and revenue declines year on year

In the first quarter, the price of crude oil fell in shock, and the cost of raw materials fell, making the profits of midstream and downstream enterprises welcome improvement space. According to the data of the National Bureau of Statistics, the total profit of the chemical fiber industry in the first quarter increased by 5.44%, but the operating income declined by 4.72% year on year due to the decline of chemical fiber prices (Table 3); The profit margin of main business is 2.14%; The loss of loss making enterprises was 3.047 billion yuan, a year-on-year decrease of 5.87%; The industry lost 39.18%.

By product, the processing difference of polyester POY, FDY and staple fiber is basically above the profit and loss line, but the processing difference fluctuated greatly in April; The processing gap of polyester DTY was basically below the profit and loss line from January to February, and has improved since the middle of March. The overall benefit of the nylon civilian silk industry is better than that of the same period in 2024. The profit level of different products is DTY>POY>FDY.

Table 3 Economic benefits of chemical fiber and related industries from January to March 2025

Source: National Bureau of Statistics

（6） Driven by the "dual and new" policy, the investment growth picked up. According to the data from the National Bureau of Statistics, the fixed asset investment in the chemical fiber industry increased by 15.8% year-on-year in the first quarter. Large scale equipment renewal is still the main driver, driving the industry to accelerate the growth of fixed asset investment, while the pressure on actual new capacity has eased.

Figure 5 Change of fixed asset investment growth rate in chemical fiber industry since 2008

Data source: National Bureau of Statistics

　　 02 Prediction of industry operation trend

Since 2025, global trade protectionism has risen sharply. Trump, the new President of the United States, has imposed tariffs on China for many times since he took office, and the intensity and scope of implementation have far exceeded market expectations. By April 10, the tariff rate imposed by the United States on China had reached 145%, and the tariff rate imposed by China on the United States had reached 125%. Under this tariff condition, there is no possibility of market acceptance for American products exported to China and Chinese products exported to the United States, and the bilateral trade is facing a substantial decoupling situation.

From May 10 to 11, the China US high-level economic and trade talks were held in Geneva, Switzerland. On the 12th, the joint statement of the China US Geneva Economic and Trade Talks was released, and the US and China promised to suspend the implementation of 24% of the 34% tariffs levied in the first round for 90 days on May 14, 2025, retain the remaining 10% of the additional tariffs, and cancel the second and third rounds of additional tariffs. In addition, China will suspend or cancel its non-tariff countermeasures against the United States. It should be noted that the 20% tariff imposed by the United States on China due to the fentanyl issue is not included. Therefore, China will still face an actual tax rate of 30%. At present, the short-term tariff reduction is undoubtedly a good news, but foreign trade enterprises should still consider the long-term nature and complexity of Sino US trade and make long-term plans.

For China, "expanding domestic demand in an all-round way" is still the primary task. With the further strengthening of macroeconomic policies, the expansion of domestic demand may largely hedge against external adverse effects. It is expected that China's economy will remain stable as a whole in the second quarter. In the medium and long term, on the basis of strong national governance capacity and huge domestic market potential, China's long-term economic fundamentals remain unchanged.

Back to the chemical fiber industry, Raw material end: Many institutions predict that the crude oil market probability in 2025 will show a pattern of weak volatility, and the central price will move down from 2024. The crude oil price is expected to weaken, and the approximate rate of chemical fiber price will also maintain low range volatility. However, the decline in raw material costs is also expected to bring some profit space to the industry.

　　 Supply side: In 2025, there will still be pressure on the industry's new capacity, the pattern of "strong supply and weak demand" will continue, and the gap between supply and demand still needs to be narrowed. Enterprises still need to strengthen self-discipline in the industry to promote the stable operation and healthy development of the industry.

　　 Demand side: Driven by the policy of trade in of consumer goods, the categories of commodities supported by the government increased significantly. However, service retail is weak, reflecting that residents' consumption expectations are still cautious and consumption capacity still needs to be repaired. With the superposition of incremental policies and stock policies, the growth rate of service consumption and commodity consumption is expected to rise. In terms of export, the Sino US Geneva talks reached important consensus and made substantive progress, which will usher in a short-term positive for textile and clothing exports.

Looking forward to the whole year, although the policy level is worth looking forward to, the chemical fiber industry is still under great operational pressure, the supply and demand level will be weak, and the industry may speed up the reshuffle. From the data indicators, as the chemical fiber industry will show a recovery growth trend in 2024, it is expected that the growth rate of various indicators in 2025 will not be too high.

(Source: China Chemical Fiber Industry Association)