Why direct-spun PSF hard to go higher after large inventory reduction

Since late Mar, direct-spun PSF inventory continues to reduce largely. Plant inventory has decreased from more than 20 days to 13 days.

Later, with the rally of feedstock prices, direct-spun PSF prices follow up, but direct-spun PSF spread remains at 800-900yuan/mt. Why is direct-spun PSF spread hard to expand?

1. Downstream spinners have purchased large quantity of PSF previously when PSF prices are low. As the PSF prices are hard to rise continually and spinners' purchasing willingness is ordinary, most of spinners sit on the sidelines.

2. Traders are dragged down by sales at lower level.

In 2024, PSF plants increase the contract goods in order to expand market shares and reduce own inventory pressure. Therefore, the product to trade flow increases, but the basis of this product is mainly negative, posing great impact on the spot market prices.

But ultimately, end-user orders and price acceptable capability are the root causes.