Boom Declined In 2019, But Development Resilience Increased. In 2020, The Chemical Fiber Industry Was Faced With Arduous Challenges.

In 2019, the economic situation at home and abroad remained complex and severe, and the global economic growth slowed down. The challenges faced by the development of chemical fiber industry at home and abroad increased significantly. The operation of the industry is stable and confined, and is affected by many factors such as the crude oil market and international trade disputes. The boom of the chemical fiber industry is declining, but the development of the industry is more resilience. In 2020, there are still many uncertain factors of instability. The external environment is still grim. The chemical fiber industry should strengthen confidence and eliminate difficulties in accordance with the requirements of the Party Central Committee, and resolutely fight the "13th Five-Year" ending war.


Economic operation of chemical fiber industry in 2019


Demand side continues to weaken, industry pressure on supply and demand pressures. According to the statistics of China chemical fiber industry, in 2019, China's chemical fiber production was 58 million 270 thousand tons, an increase of 7.8% over the same period, of which viscose fiber increased by 2.8% over the same period, polyester fiber increased 8.3% over the same period, and nylon increased by 5.9% over the same period last year. Compared with 2015, the output of chemical fiber increased by an average of 4.8% per year in 13th Five-Year, slightly higher than that in 13th Five-Year, but basically in a reasonable range.


Global textile industry layout adjustment, China's chemical fiber exports continued to increase. According to the statistics of China Customs, the export volume of chemical fiber in China was 5 million 60 thousand tons in 2019, an increase of 16.1% over the same period last year, and the growth rate was 8.3 percentage points higher than that in 2018. Affected by the Sino US trade war, the export market structure of China's chemical fiber has been adjusted. In 2019, the export of chemical fiber to the United States decreased by 39% over the same period last year, accounting for 4 percentage points of the total volume of China's chemical fiber exports. Meanwhile, the volume of exports to ASEAN and the main countries along the belt along the same period increased significantly, reflecting the adjustment of the layout of the global textile industry. On the whole, China's chemical fiber export market is more dispersed and the US share is less than 5%. Therefore, Sino US trade war has led to a sharp decline in China's export of chemical fiber to the United States, but basically it can be made up by seeking alternative markets. However, the Sino US trade war has a greater impact on the products of the US as the main export market, such as polyester staple. In 2019, China's exports of pet dacron to the United States decreased by 35.1% compared to the same period last year.


Chemical fiber market downward pressure, down to historical lows. After experiencing the deep adjustment in the fourth quarter of 2018, the chemical fiber market in the first quarter of 2019 has gradually stabilized, and some of its products have even risen. But after April, the boom of the chemical fiber industry has declined due to multiple factors such as crude oil and Sino US trade war. The chemical fiber market has been under the direction of turbulence. Although there has been a small rebound, it is difficult to reverse the big trend of decline, and the main products market. Prices have been refreshing for nearly three years. The main reason for the continued decline of the market is that the cost of raw materials has dropped sharply, the growth of terminal demand has declined, and some stages of production capacity have been overloaded.


The scale of fixed assets investment has been reduced, and the growth of new capacity has slowed down. Due to the decline of industry boom in 2019, investment in enterprises has also been cautious. Based on the rapid growth of fixed assets investment in the previous two years, the investment has been reduced rapidly, and the volume of investment in some projects has been postponed. According to China National Bureau of statistics, the fixed assets investment in chemical fiber industry decreased by 14.1% in 2019. The new capacity of the chemical fiber industry has a clear tendency to concentrate on the dominant enterprises, especially in the polyester polyester industry, and the pace of endogenous growth and merger and reorganization is quickening, and the concentration degree of the industry is further enhanced.


Operation quality and efficiency fluctuate, and the industry is faced with arduous test. As the boom of the chemical fiber industry has declined, the market price has continued to decrease, and the price gap between products and raw materials has also shrunk. According to the statistics of China's National Bureau of statistics, the main business income of chemical fiber industry in 2019 was 857 billion 120 million yuan, an increase of 4% over the same period last year, and realized a total profit of 31 billion 100 million yuan, a decrease of 19.8% compared with the same period last year. The industry's deficit was 22.1%, an increase of 3.9 percentage points over 2018, and the deficit of deficit companies also increased by 73.2% over the same period last year. When the industry was in difficulty, it forced the enterprises to enhance their operational capacity to protect cash flow and reduce risks. The turnover rate of accounts receivable and finished product turnover rate accelerated as compared with the same period last year. At the same time, the proportion of three fees decreased by 0.18 percentage points over the same period.


Overall, under the complex situation of risk challenges at home and abroad, the downward pressure on China's chemical fiber industry has increased since 2019, but there are many bright spots in the operation of the industry: three major private refinery projects have been put into operation, the industrial chain "integration" process has been accelerated, the first 5G intelligent workshop was born, the industry has developed closer to intelligent development, and the CV alliance has been internationally recognized. The development of green industry is fruitful, and the enterprises in the head and differential sectors still maintain strong competitiveness. All these have enhanced the toughness of the industry development, enhanced the ability to resist risks, and further promoted the high quality development of China's chemical fiber industry.


Operation background and trend prediction of chemical fiber industry in 2020


In 2020, the year of completion of a well off society and the "13th Five-Year" plan ended. At the beginning of the new year, we witnessed the outbreak of the new crown pneumonia epidemic. We saw the collapse of crude oil and the three fuses that American stocks haven't seen in decades. With an unusual beginning, the situation of China's textile and fiber industry will be more complex and severe, and the uncertainty of development prospects will be enhanced.


The International Monetary Fund (IMF) said in March 5th that it would reduce the global economic growth expected in 2020 because of the impact of the epidemic. It is expected that the global economic growth rate in 2020 will be 2.9% lower than that in 2019, but it is hard to predict how low and how durable it will be. China's economic growth was inevitably affected in 2020, but the fundamentals of China's economy have not changed for a long time. China's industrial economy is still improving. The new crown pneumonia epidemic has brought us great pain. But it has also created a new space for China's further reform and opening up. We must strengthen our confidence, persist in deepening reform and tap the potential market of domestic demand, and China's economic growth can still be expected.


Looking ahead to 2020, for the chemical fiber industry, it will be a tough winter. The crisis will overlay the collapse of crude oil, the risk of global economic turbulence will increase, and the development pressure of the chemical fiber industry will increase. But at the same time, the positive factors still exist. The resilience of the industry to resist downside risks is increasing, and there is no room for further long-term downwards. In view of the impact of the epidemic, the country has begun to emerge. Taiwan's various supportive policies help enterprises to gradually ease operational pressure.


Based on the macroeconomic trend, industry production, price trend, structural adjustment, and new crown pneumonia epidemic, we conclude that the chemical fiber industry is expected to recover from the epidemic in the second half of the year. It is expected that the annual output of chemical fiber will increase by about 3% compared with the same period last year. Imports were flat or slightly lower than the previous year, and exports grew by about 5%.


After the outbreak, we should develop. The chemical fiber industry should ponder over what to do in the future and prepare for the rainy day. The epidemic will give rise to new formats and beneficial industries. The chemical fiber industry should seriously study and identify opportunities, study how to make good use of new formats, adjust business structures and processes in a timely manner, so as to better adapt to the new formats and new economy after the epidemic. We should be aware of some forces that may cause change, which will profoundly change the present and drive future development.


The steady development of the chemical fiber industry is still a major trend. We must focus on the long-term development of the industry, enhance the overall competitiveness of the industry, grasp the new opportunities such as upgrading and upgrading of the industry, enhancing technological innovation capability and accelerating green development. We must strive to defuse risks, strengthen industry self-discipline, avoid unhealthy competition, concentrate our efforts on doing our business well, and make the domestic market well, and increase the external pressure to increase. We will deepen reform and opening up and accelerate the development of high quality industries.