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U.S. Textile Bag And Canvas Market – China’s Imports Bounces Back after Two Years of Decline

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U.S. Textile Bag And Canvas Market – China’s Imports Bounces Back after Two Years of Decline

IndexBox has just published a new report: ‘U.S. Textile Bag And Canvas Market. Analysis And Forecast to 2025’. Here is a summary of the report’s key findings.

The revenue of the textile bag and canvas market in the U.S. amounted to $7B in 2018, increasing by 7.8% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). The market value increased at an average annual rate of +6.4% over the period from 2013 to 2018; the trend pattern remained consistent, with somewhat noticeable fluctuations being observed throughout the analyzed period. The pace of growth was the most pronounced in 2014 with an increase of 18% against the previous year. Over the period under review, the textile bag and canvas market attained its maximum level in 2018 and is expected to retain its growth in the near future.

Production of Textile Bags And Canvases in the U.S.

In value terms, textile bag and canvas production amounted to $4B in 2018. The total output value increased at an average annual rate of +8.3% from 2013 to 2018; the trend pattern indicated some noticeable fluctuations being recorded over the period under review. The most prominent rate of growth was recorded in 2014 when production volume increased by 20% against the previous year. Textile bag and canvas production peaked in 2018 and is expected to retain its growth in the immediate term.

Exports from the U.S.

In 2018, the amount of textile bags and canvases exported from the U.S. stood at 6.5K tonnes, growing by 51% against the previous year. Over the period under review, textile bag and canvas exports, however, continue to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2018 with an increase of 51% y-o-y. Over the period under review, textile bag and canvas exports reached their peak figure at 7K tonnes in 2014; however, from 2015 to 2018, exports stood at a somewhat lower figure.

In value terms, textile bag and canvas exports totaled $47M (IndexBox estimates) in 2018. Overall, textile bag and canvas exports, however, continue to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2017 when exports increased by 36% against the previous year. Exports peaked at $59M in 2014; however, from 2015 to 2018, exports failed to regain their momentum.

Exports by Country

Thailand (578 tonnes), Australia (567 tonnes) and Trinidad and Tobago (464 tonnes) were the main destinations of textile bag and canvas exports from the U.S., with a combined 25% share of total exports. These countries were followed by Viet Nam, Poland, China, India, Russia, Malaysia, Nicaragua, the Dominican Republic and Costa Rica, which together accounted for a further 46%.

From 2013 to 2018, the most notable rate of growth in terms of exports, amongst the main countries of destination, was attained by Viet Nam (+1,030.1% per year), while the other leaders experienced more modest paces of growth.

In value terms, the largest markets for textile bag and canvas exported from the U.S. were Poland ($7.6M), Australia ($6.7M) and the Dominican Republic ($4.4M), with a combined 40% share of total exports. Costa Rica, China, Trinidad and Tobago, India, Nicaragua, Viet Nam, Thailand, Malaysia and Russia lagged somewhat behind, together comprising a further 18%.

In terms of the main countries of destination, Viet Nam (+393.6% per year) recorded the highest rates of growth with regard to exports, over the last five years, while the other leaders experienced more modest paces of growth.

Export Prices by Country

The average textile bag and canvas export price stood at $7,219 per tonne in 2018, waning by -45.8% against the previous year. Overall, the export price indicated a slight increase from 2013 to 2018: its price increased at an average annual rate of +1.3% over the last five years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. The growth pace was the most rapid in 2017 when the average export price increased by 52% against the previous year. In that year, the average export prices for textile bags and canvases reached their peak level of $13,329 per tonne, and then declined slightly in the following year.

There were significant differences in the average prices for the major foreign markets. In 2018, the country with the highest price was Poland ($17,736 per tonne), while the average price for exports to Russia ($272 per tonne) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was recorded for supplies to the Dominican Republic (+55.6% per year), while the prices for the other major destinations experienced more modest paces of growth.

Imports into the U.S.

In 2018, the textile bag and canvas imports into the U.S. totaled 351K tonnes, rising by 8% against the previous year. The total import volume increased at an average annual rate of +2.1% over the period from 2013 to 2018; the trend pattern remained relatively stable, with somewhat noticeable fluctuations in certain years. The most prominent rate of growth was recorded in 2018 with an increase of 8% against the previous year. Over the period under review, textile bag and canvas imports attained their maximum at 360K tonnes in 2015; however, from 2016 to 2018, imports remained at a lower figure.

In value terms, textile bag and canvas imports totaled $1.5B (IndexBox estimates) in 2018. Overall, textile bag and canvas imports continue to indicate a relatively flat trend pattern. The pace of growth appeared the most rapid in 2018 with an increase of 8.9% against the previous year. Imports peaked at $1.6B in 2015; however, from 2016 to 2018, imports failed to regain their momentum.

Imports by Country

In 2018, China (197K tonnes) constituted the largest supplier of textile bag and canvas to the U.S., with a 56% share of total imports. Moreover, textile bag and canvas imports from China exceeded the figures recorded by the second-largest supplier, India (83K tonnes), twofold. The third position in this ranking was occupied by Bangladesh (25K tonnes), with a 7.1% share.

From 2013 to 2018, the average annual growth rate of volume from China amounted to -2.2%. The remaining supplying countries recorded the following average annual rates of imports growth: India (+13.0% per year) and Bangladesh (+7.4% per year).

In value terms, China ($905M) constituted the largest supplier of textile bag and canvas to the U.S., comprising 62% of total textile bag and canvas imports. The second position in the ranking was occupied by India ($218M), with a 15% share of total imports. It was followed by Bangladesh, with a 8.4% share.

From 2013 to 2018, the average annual rate of growth in terms of value from China stood at -3.0%. The remaining supplying countries recorded the following average annual rates of imports growth: India (+11.5% per year) and Bangladesh (+5.9% per year).

After two years of decline, Chinese imports of textile bag and canvas into the U.S. rebounded in 2018, with an increase of 8.5% y-o-y.

Import Prices by Country

In 2018, the average textile bag and canvas import price amounted to $4,139 per tonne, standing approx. at the previous year. In general, the textile bag and canvas import price, however, continues to indicate a temperate descent. The growth pace was the most rapid in 2018 an increase of 0.8% against the previous year. Over the period under review, the average import prices for textile bags and canvases attained their maximum at $4,572 per tonne in 2013; however, from 2014 to 2018, import prices remained at a lower figure.

There were significant differences in the average prices amongst the major supplying countries. In 2018, the country with the highest price was Bangladesh ($4,877 per tonne), while the price for India ($2,627 per tonne) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was attained by Indonesia, while the prices for the other major suppliers experienced a decline.

Companies Mentioned in the Report

Dhs Systems, Rainier Industries, Covercraft Industries, Duluth Trading Company, North Sails Group, J & M Industries, Anchor Industries, Thomas Sign and Awning Company, Holland Awning, Outdoor Research, Hdt Expeditionary Systems, Veada Industries, C. R. Daniels, Bestop, Starr Aircraft Products, ADM Corporation, Kenneth Fox Supply Company, Polytex Fibers, Adco Products, Marine Accessories Corporation, Gleason Corporation, Webasto-Edscha Cabrio USA, Outdoor Venture Corporation, Magna Car Top Systems of America, Mpc Group, Ajr Enterprises, Targus Group International, Bluewater Defense, Mondi Bags Usa

Source: IndexBox AI Platform

RENEWING RARE EARTH THREATS, CHINA DIGS DEEP FOR LEVERAGE IN TRADE WAR

Optics and Symbolism

On May 28, the South China Morning Post reported that upon visiting one of China’s major rare earth mining and processing operations in Jiangxi Province, President Xi Jingping commented he would give priority to domestic demand over exports. Beside him was his lead negotiator in trade talks with the United States. At the same time, his top economic planning agency leaked it would not rule out using rare earths as a bargaining chip in the trade war.

The visit and Xi’s signal came just days after the Trump administration ratcheted up U.S. tariffs on $200 billion worth of Chinese goods followed by China’s response that it would increase in tariffs on $60 billion worth of U.S. goods.

When it comes to trade in rare earths, we’ve been here before. It’s a story worth unpacking as yet another cautionary tale about the perils of China’s meteoric rise to dominance in supplying the world with critical inputs, in this case the metals that lie behind today’s — and tomorrow’s — modern electronics, high-tech and advanced military applications

Magic Pixie Dust in the Earth’s Crust

There’s a group of 17 chemical elements on the periodic table that are classified as rare earth elements or rare earths. They can discharge and accept electrons and mix well with other elements to convey magnetism, luminescence, added strength and other key properties.

For example, neodymium helps power the magnets in hard drives and hybrid cars; praseodymium is deployed to create strong metals for aircraft engines; gadolinium is used in MRI scanning equipment; yttrium, terbium and europium are used to produce our computer, TV and device screens.

As our consumer tech and industrial products become more sophisticated and new uses are discovered, demand for rare earths will only grow. Rare earths also play a key role in some of our military’s most advanced defense tools from stealth technologies to guidance systems and armored vehicles.

REE table

Not Rare, But Hard to Harvest

The issue is not that rare earth deposits are scarce, but that they are challenging and costly to mine. Rare earths tend to be scattered rather than clustered, and bond easily with other minerals, so the elements must be separated in painstaking and costly processes that produce toxic and hazardous waste. Significant investments over years are required to get a mine and processing facility up and running and to control for environmental risks.

China’s Rise to Top Producer, User and Exporter

Although China began mining rare earths in the 1950s, the Chinese government put the capacity to mine and produce rare earths on its critical path toward economic modernization in the 1980s. Rare earths are now part of China’s Made in China 2025 plan to achieve global advantage in advanced manufacturing, high tech and green technologies.

As was the case in other industries such as steel, glass, paper and auto parts, the Chinese government deepened its intervention in the rare earths sector in 1990s to ensure access to low-cost supplies for domestic producers. Government support enabled Chinese companies to ramp up mining and processing of rare earths even while operating at a loss.

As production grew, exports were encouraged through export rebates, attracting more Chinese entrants to the industry. Excess production flooded global markets, setting in motion a downward spiral in prices and profitability for producers in other countries. Between 2002 and 2005, rare earth prices dropped to historic lows, forcing most of the world’s mines outside China to close.

Chinas Share of REE

An Overplayed Hand?

Having achieved global dominance, producing over 90 percent of the world’s rare earths, China created a two-tier pricing system through a variety of export controls. According to data from the U.S. International Trade Commission, by the beginning of 2010, U.S. importers were paying an average $5,589 per metric ton for rare earths from China.

When China announced in July 2010 it would restrict exports of rare earths by 70 percent and impose minimum export price levels, rare earth prices surged by the fall of 2011 to $158,389 per metric ton. By applying export duties, quotas and price floors to exports, China created a two-price system, keeping low-priced supplies for itself. U.S. manufacturers had no alternative but to curb spending on Chinese rare earths, causing a drop in U.S. imports.

In March 2012, the United States, European Union and Japan initiated a dispute settlement case in the WTO against China’s rare earth restrictions. Two years later, a WTO dispute panel agreed that China had violated commitments it made when it joined the WTO to eliminate dual pricing practices, certain export duties, and price controls. The panel also found China violated other aspects of other WTO agreements such as those governing the administration of export quotas. After losing its appeal, China agreed to remove quotas by December of 2014 and abandon its export tariffs by May 2015.

Damage Done

Life goes on in the global economy and for industry players over the two years that WTO cases are being decided. In a 2017 National Review article, Mike Fredenburg explains what happened to the U.S. company Molycorp that owned the Mountain Pass mine in California, which at one time was the largest producer in the world.

“In 2012, U.S.-based Molycorp, attracted to the higher prices that resulted from the Chinese government’s efforts to boost profits by restricting REE [rare earth elements] exports, made plans to ramp up domestic REE production, investing nearly $800 million in state-of-the-art mining operations in California. At the moment when the project was poised to succeed, China flooded the market with REEs just long enough to knock Molycorp out of the market. After its Chapter 11 bankruptcy reorganization, Beijing is allowing Molycorp to continue operations in China. But once again, the U.S. has no domestic REE production.”

China lost in the WTO. But in effect, China no longer needs the trade tools that violated its WTO obligations. The Molycorp mine was bankrupt, its rare earth assets sold to a consortium of buyers that included a Chinese firm with ties to the government.

The Next Chapter for Rare Earths Production and Use

China’s experiments restricting exports served as a wake up call for global manufacturers and foreign governments, who are working on Plan B to China’s dominance in rare earths. Leading manufacturers including General Electric and Toyota among others have openly announced they would cultivate and support alternative suppliers while finding ways to reduce their use of rare earth elements by reengineering their product designs.

China controls 36 percent of the world’s reserves, so government agencies have stepped up efforts to find more deposits. Mining companies around the world are reevaluating old rare earth prospects for possible development and are working to develop innovative extraction techniques to achieve what fracking did for the natural gas industry in the United States.

World REE Production and Reserves

Back to the China Playbook

China will not go quietly into that good night when it comes to the advantage it created in rare earths production. Following its playbook, China is working to consolidate the number of domestic rare earths producers (all have ties to the state) and tighten oversight of resource use and production rights. No need for WTO-illegal export restrictions when state-owned or state-directed companies can directly limit their business sales with foreign buyers.

Recognizing that domestic demand could outstrip production, China is hedging its bets by purchasing rare earth resources in other countries, though not always successfully. Notably, the China Non-Ferrous Metal Mining Co. made a $250 million bid for Australia-based Lynas back in 2009-10, but was rejected by Australia’s Foreign Investment Review Board.* The Chinese state has also acquired multinational firms with science and technology assets critical to helping Chinese manufacturers move up the value chain to produce the intermediate goods and advanced technologies that use rare earths.

Meanwhile, China is stockpiling rare earths. Why?

Is the government trying to induce foreign manufacturers to produce in China? Would China withhold rare earths in the race to global use of 5G on Chinese technology platforms? Or does China simply need to ensure access to this valuable resource for the development of its own advanced manufacturing sectors?

When commenting about the role of rare earths in the trade war, a representative from the National Reform Development Commission said, “If anyone wants to use the products made from our rare earth exports to try to counter China’s development, then the people from the southern Jiangxi Communist revolutionary base would not be happy, and the people of China will not be happy.”

Perhaps the stockpiling is emblematic that China thinks the United States is trying to contain China’s economic expansion. Threatening to withhold rare earths could be China’s way of digging into this trade war with the United States.

More reading:

For context see Congressional Research Service ReportChina’s Rare Earth Industry and Export Regime

For contemporary commentary see Stewart Patterson’s Rare Earths: The Threat of Embargo and the Clash of Systems

*Editor’s note: this sentence contains a correction from the originally posted version.

Andrea Durkin is the Editor-in-Chief of TradeVistas and Founder of Sparkplug, LLC. Ms. Durkin previously served as a U.S. Government trade negotiator and has proudly taught international trade policy and negotiations for the last fourteen years as an Adjunct Professor at Georgetown University’s Master of Science in Foreign Service program.

This article originally appeared on TradeVistas.org. Republished with permission.