Market Overview of China’s Artificial Synthetic Leather Industry in 2023

Market Overview of China's Artificial Synthetic Leather Industry in 2023

In 2023, the artificial leather industry in China had another extraordinary year. On one hand, the global economy still showed no significant improvement, with challenges such as the Russia-Ukraine war, the Israeli-Palestinian conflict, fluctuating raw material prices, and a substantial rise in shipping costs, resulting in weak end demand. Against this backdrop, China’s artificial synthetic leather industry market as a whole exhibited a downward trend. On the other hand, propelled by the continuous promotion of the “double carbon” strategy, enterprises in this industry also accelerated the pace of green and sustainable high-quality development, pushing the entire industrial chain towards green upgrading.

I.Brief analysis of production in 2023

China’s production of artificial synthetic leather in the first three quarters of 2023 was 1.69 million tons, down 11% from the same period in 2022. It is expected that China’s production of artificial synthetic leather for the whole year of 2023 is expected to decline by about 10% compared with that of 2022. Over the past five years, China’s artificial synthetic leather production has shown a year-on-year decline. Compared with 3.29 million tons in 2019, it is expected to have dropped nearly 30% of the output, and the output value has fallen from nearly 100 billion yuan to less than 80 billion yuan.

II. New production capacity across China in 2023

Despite the fact that the artificial leather synthetic leather industry has gone through a tough year in 2023 due to the downturn in the domestic and international economy and lack of market demand, with a large number of fashion brands continuing to practice their dual-carbon goals, industry players were driven to push the envelope in terms of greening, upgrading new technologies, developing new products, adding or optimizing production lines.
In 2023, there are 32 new projects across the country, excluding projects of alteration, expansion, technical transformation, etc., an increase of 5 new projects over the 27 new projects in 2022. There are more new projects related to artificial leather synthetic leather within Guangdong, Zhejiang, Anhui, Jiangsu, Jiangxi and Guangxi, which can be seen as the industry continues to push forward the process of artificial leather synthetic leather cluster to the China central and western regions and the determination to build a green supply chain for the whole industry. From the new projects, there are more water-based polyurethane, water-based synthetic leather, solvent-free synthetic leather projects. Meanwhile, bio-based hydraulic PU leather, synthetic leather machinery and other manufacturing and the project of industrial solid waste (synthetic leather, etc.) resource treatment and utilization has also appeared.

III. Continuous breakthroughs in synthetic innovations

  • Anhui ANLI Material Technology Co., Ltd.: Focus on new material innovations such as bio-based, water-based and GRS recyclable;
  • Foshan City Gaoming Shangang Technology Co., Ltd: Innovative research and development of biodegradable BPU leather, and practice the green and sustainable strategy of the enterprise;
  • “Water-based synthetic leather manufacturing technology for blocking VOCs at the source” was warded the First Prize of Science and Technology Progress by the Ministry of Education in 2022;
  • Zhejiang Hexin Holdings Co., Ltd.: was awarded the Second Prize of Science and Technology Progress for the innovation across the microfiber industry chain;
  • Huafon Microfibre Co.,Ltd.: Newly developed, mass-produced, purely water-based, sustainable material has already established brand partnerships;
  • SynMetabio has raised tens of millions of dollars with synthetic biotechnology to grow 100% bio-based leather;
  • Water-based solvent-free sofa leather and other three products were selected for the national “green manufacturing list”;
  • Shandong Tongda Island New Materials: “A preparation method and application of microfiber leather simulating natural top layer leather” won the Weifang Patent Prize.
  • Dow Inc: LuxSense Silicone Synthetic Leather bags the 2023 SEAL Award for Sustainable Innovation;
  • Zhejiang Jiake New Material Technology Co., Ltd.: Plant waste into synthetic leather to help industry green upgrade;
  • Budweiser brings its beer leather and other sustainable achievements to the 2023 Industrial Green Development Achievement Exhibition;
  • Shanghai HIUV New Material Co., Ltd.: patented ultra-soft radiation cross-linked polyolefin elastomer artificial leather;
  • Zhejiang Meisheng New Material Co., Ltd.: Important progress made in the technology project related to microfibre leather for automotive vehicle interiors;
  • Zhejiang Hexin Holdings Co., Ltd.: Microfibre eco-leather” was selected as a key R&D project in Jiaxing.

IV. China’s synthetic leather import and export performance

According to the statistics of customs import and export data, in 2023, the total export of China’s artificial leather synthetic leather was 1.24 billion meters, down 1.59% year-on-year, and the total export value of 2.99 billion U.S. dollars in 2023, down 7.14% year-on-year, which indicates that in 2023, China’s artificial leather synthetic leather exports showed a trend of lower volume and price. From the analysis of products, the total export of PVC synthetic leather is 494 million meters, accounting for 40.23%, and the total export of PU synthetic leather is 723 million meters, accounting for 58.88%. Analyzed from export destinations, the top ten export destinations are Indonesia, Vietnam, Nigeria, Thailand, Algeria, Philippines, Egypt, Mexico, Cambodia and India.

Based on the customs import and export data, China imported 0.31 billion meters of artificial leather synthetic leather products in 2023, down 13.89% year-on-year, with a total import value of USD 310 million, and an average import unit price of USD 10.11 per meter, down 3.53% year-on-year.

V. Summary

In 2023, despite global economic challenges, China’s artificial leather synthetic leather industry demonstrated resilience and commitment to green development. The overall performance of the market situation fell short of expectations. In 2024, the global trade environment is still facing the challenges of complexity, severity, rising uncertainty and other risks, but in the process of accelerating the construction of green, healthy, sustainable and high-quality development of China’s artificial leather synthetic leather industry, the enterprises need to enhance their confidence and backbone, deeply integrate into the “double-cycle” pattern, and actively explore the domestic and international markets, give full play to their own advantages and win the battle against the global market.