Recycled PSF: plant operating rate reduces to a low level in Apr

In Apr, many recycled plants curtail production or suspend operation, and operating rate reduces to a multi-year low level, close to the period during the pandemic in 2020.

1. Operating rate in major recycled production bases reduces except South China

Currently, operating rate of re-PSF plants is only slightly above 50%. Some plants still maintain production, but affected by the tight feedstock supply, high product inventory, restrained transportation and epidemic-related control management measures on downstream plants. Based on the epidemic situation in East China, more plants may cut production or suspend operation in end Apr and early May.

Plants in Jiangsu and Zhejiang are impacted much by the epidemic in Shanghai, especially HC re-PSF plants, operating rate reduces quickly. Most big plants in North Jiangsu, Anhui and Zhejiang curtail production or suspend operation. The situation is similar in Shandong. The plants that maintain production also face high product inventory. The operation in South China (Fujian and Guangdong) is relatively stable.

In Nantong of Jiangsu Province, the epidemic control management measures may continue. Local downstream plants and traders have very low feedstock inventory. If the logistics recover, intensive replenishment may be anticipated, but it may not last long. On concern about the high product inventory and tight feedstock inventory in East China during Apr and May, plants may be sold under negotiation.

2. Close virgin PSF market change

Affected by sluggish HC re-PSF market, a few big plants in Hebei turn to produce from HC re-PSF to solid re-PSF. The product in North Jiangsu is hard to be sold to North China, and losses are seen. In addition, the downstream demand in South China is weak, so plants cut production or suspend operation. In Jiangyin of Jiangsu, feedstock and product transportation is blocked affected by the strict control on logistics, and some plants curtail production. In Wujiang of Jiangsu, a few plants have cut operating rate, and inventory in some plants is around 20 days.

Recently, close virgin PSF offers stay flat mostly, and trading prices are mixed. Price spread between North China and South China narrows, and prices have no big difference for medium-grade re-PSF, close virgin PSF and HTLS close virgin PSF.

In general, more recycled plants cut operating rate or suspend operation, and some plants plan to curtail production or shut down in late Apr and early May.