Direct-spun PSF dragged despite strong upstream market

Direct-spun PSF suffers losses again due to less increase than PTA.

The reasons behind the robust PTA are rising crude oil and tight supply brought on by advanced maintenance. The PX-PTA spread has also improved moderately.

However, there is a different picture in downstream. The sales of polyester yarn are modest. The prices in Fujian and Jiangxi have increased along with PSF, but in Jiangsu, Zhejiang and northern China, the prices stay flat. As a result, the cash flow of polyester yarn gets compressed.

In terms of different products, the cash flow of pure polyester yarn is not reduced much due to small increase in PSF, but that of polyester/cotton yarn has lost much ground due to sharp rise of cotton. It is also reflected in the sales of polyester yarn. The yarn containing more PSF was sold better than that with more cotton, let alone cotton yarn which has been suffered losses.

The weakness of polyester yarn is mainly attributed to plain orders and shutdown of printing and dyeing plants. Currently, yarn spinners are concerning about the inventory to mount amid coming National Day holiday and more suspension of downstream plants for holiday, so they still put priority on selling.

In the aspect of raw materials stocks, spinners and traders mostly restock at 6,800-7,000yuan/mt. The inventory of spinners mostly range in 15-40 days. Facing uncertainties during National Day holiday and unclear policies on control of energy consumption, the spinners show more hesitant to high-priced PSF. That’s why PSF does not jump so much as polyester feedstock. In conclusion, it is the weakness of downstream yarn market that drags direct-spun PSF market.

stock. In conclusion, it is the weakness of downstream yarn market that drags direct-spun PSF market.