Chemical fiber market review

In the first quarter of 2022, companies were under strains with high plant operating rates. In the beginning of 2022, chemical fiber price continued the strength, however, product inventory kept increasing with plant operating rate on the high side. In late Feb, international crude oil prices spiked as Russia-Ukraine conflict broke out, and thus higher cost of raw materials brought increasing risks to chemical fiber industry. Afterwards, the pandemic resurged and spread in some regions of China, leading to logistics restrictions due to measures to combat the pandemic. With wholesale and retail sales under pressure, end-use plant cutting operating rates in mid and late Mar amid slowdown of product circulation.

In the second quarter, chemical fiber production dropped on year due to the pandemic as well as weak demand. In Apr, plant operations took a hit by the pandemic, with operating rates of several products dropping sharply and even refreshing this year’s low. After the Tomb-Sweeping holiday in early Apr, some regions were locked down with restricted logistics due to the pandemic. Chemical fiber’s downstream plants were shut for maintenance intensively. In May and Jun, market sentiment recovered to some extent with the pandemic impact winding down. However, demand had yet to increase, slowing down the recovery of chemical fiber production.