Recently, with the strong recovery in Southeast Asia, there has been a shift in orders in the market, and it is not uncommon to think that Vietnam and others are “stealing” China’s export orders. Some experts have analyzed that in recent years, China’s export share has declined and Vietnam’s export share has increased, reflecting the relocation of labor-intensive textile manufacturing such as clothing, but its reliance on China’s imports of raw materials. Larger-scale electromechanical products have a similar logic. Vietnam is engaged in assembly and low-end parts production, and a large proportion of raw materials come from China. While Vietnam’s share has increased, China’s share has not declined. Currently, China is Vietnam’s main export market for textiles, especially recycled yarn, accounting for nearly 60% of total exports.
Domestic polyester product export volume trend chart from 2020 to 2022
In addition, when domestic downstream demand is weak due to the epidemic, raw material exports have become a way for polyester companies to alleviate high inventories. Indeed, the export form of polyester products will gradually improve starting from the second half of 2021. Currently, polyester bottles among the products in the industry chain The overall export volume of sheets accounts for more than 40%, followed by polyester filament. The reasons for the increase in exports of polyester products are, on the one hand, the improvement in external demand from September to October and the return of orders from Southeast Asia. On the other hand, the instability of overseas installations of polyester bottle flakes, production reduction or shutdown, obvious domestic price advantages, and increase in overseas demand, Some businesses are worried about the recurrence of the epidemic and are purchasing in advance. As of the first half of this year, with further support from the favorable RMB exchange rate for exports, polyester product exports are still increasing.
However, the favorable export of raw materials may soon usher in a change. According to Vietnam’s “Vietnam+” report on July 25, the Vietnam Cotton Spinning Association (VCOSA) operating performance report for the first half of 2022 showed that in the first five months of 2022, Vietnam’s textiles, fibers, and fabrics The export volume reached US$18.73 billion, an increase of 20.81% over the same period in 2021; of which textiles and clothing reached US$14.99 billion (an increase of 22.2% year-on-year), fibers and yarns reached US$2.37 billion (an increase of 10%), and geotextiles reached US$376.8 million (an increase of 22.2% year-on-year). 27%), raw materials and excipients US$979.8 million.
VCOSA assessed that with the above performance, Vietnam surpassed South Korea for the first time and became the world’s sixth largest fiber exporter.
Obviously, the emergence of the above news indicates that this situation may be undergoing fundamental changes. The United States and Europe are the world’s largest textile import markets. As these two major markets tend to reduce their imports of textile raw materials and accessories from China, they are increasing their imports from other countries. Therefore, Vietnam’s textiles, fibers, and fabrics have huge export potential in these two markets. On the contrary, it is even more stressful for domestic enterprises.
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