PFY prices have limited downward space despite of falling feedstock

Operating rate of downstream market ascended to yearly high in Zhejiang and Jiangsu but may have small upward space

Operating rate of twisting plants increased to 91%: 90-100% in Changshu, Xiaoshan, Shaoxing and Changxing, 90% in Taicang and at 80% in Cixi.

Operating rate of fabric mills rose to 88%: with run rate of warp knitting plants in Haining at above 90%, around 80% for warp knitting plants in Changshu, 90% for water-jet units in Siyang and Wujiang, above 90% for water-jet plants in Changxing and 80% for circular knitting mills in Xiaoshan and Shaoxing.

Operating rate of dyeing plants climbed to 90% in Zhejiang and Jiangsu: at above 70% in Changshu, at 90% in Wujiang, Jiangsu and near 100% in Changxing, Haining and North China.

Stocks of PFY and grey fabrics
Stocks of grey fabric accumulated in Zhejiang and Jiangsu with scarce new orders, especially warp knitting section.

PFY stocks of downstream market remained high in Zhejiang and Jiangsu, mostly able to guarantee production for 1-2 months, shorter into end-Mar and longer for above 2 months.

Overall stocks of PFY rose recently amid dull sales, while POY and FDY stocks remained low, hitting the lowest level since 2020 and staying at 8 days and 18 days respectively.

Price of PFY and grey fabric was largely stable; cash flow concentrated on PFY sector
Mainstream PFY companies continued stabilizing price to cope with falling feedstock price. PFY companies saw low stocks of finished goods and PFY stocks of downstream companies were abundant. Under such circumstance, cutting price may be hard to stimulate sales. Few PFY plants discounted price for promotion and the decrement was small.

Price of most grey fabrics was stable temporarily. Some grey fabric plants that saw high stocks at hand slashed price for promotion as upstream feedstock price fell back, mainly conventional water-jet fabrics.

Cash flow of PFY was moderate now with plunging feedstock price but stable yarn price, with the average profit of POY and FDY150D at above 1,000yuan/mt.

Most conventional grey fabrics were not profitable now as price failed to chase up quickly.

Theoretical cash flow of PFY was high now but transactions were sluggish. Thus, current high cash flow does not have many real significance. Price of PFY is supposed to reduce limitedly in short run. After stocks accumulated, PFY companies may discount for promotion in end-Mar, which should be noted.