China’s MMF Production Surpasses 50M Tons in 2018

According to the China Chemical Fibers Association, the nation’s production of man-made fibers in 2018 increased by 7.7% over the previous year to 50.11 million tons. Of this, the main group of polyester grew by 8.5% to 40.15 million tons.

Unstable factors were numerous, such as the sharp increase in PTA prices and weak Reminbi, but the growth accelerated supported by strong business in the mid- and downstream sectors. Earnings were also favorable.

Production decreased for acrylic fibers (down 16.5% to 614,500 tons) and vinylon (down 2.5% to 100,800 tons). Meanwhile, production increased for spandex (up 10.8% to 683,200 tons), nylon (up 5.3% to 3.30 million tons), rayon filament (up 1.4% to 182,400 tons), rayon staple fiber (up 7.9% to 3.77 million tons) and polypropylene (up 2.3% to 347,800 tons).

Because of structural reforms, the growth in production was less than 5%, but 2018 production grew at a greater rate.

As a result of strong sales of polyester and nylon, the average operation rate of the MMF industry was the highest in two years. Particularly, polyester filament maintained a high operation rate with the rate for direct spinning plants being higher than 90% during the busy season and over 80% during the off-season period.

2018 MMF exports grew by 6.0% to approximately 4.3 million tons. Exports of polyester filament increased by 9.9%, those of polyester staple fiber by 2.1%, and rayon staple fiber by 20.8%.

The pretax profits of MMF producers grew by 10.3% to 39,389.21 million yuan, but the operating profit rate was 4.9%, down 0.1 point from the previous year.

The favorable production situation invigorated capital investments. The growth of investments in fixed assets by MMF producers slowed down to 2.9% in 2015, 0.3% in 2016 and 19.2% in 2017, but it recovered to 29.0% in 2018.