Polyester polymerization rate close to the periodical bottom

According to the survey made by CCFGroup, most DTY plants and fabric mills in Zhejiang and Jiangsu will suspend production near Jan 10.

The polyester polymerization rate also almost touches the periodical bottom.

The polyester polymerization rate is slightly revised up from Jan as the polyester capacity is revised down from Jan and the polyester production has been low.

PFY plants have scaled down production earlier were one of the reasons. Demand for PFY has been sluggish in 2022 and PFY producers did not run at high capacity, mainly around 70% in Q2. PFY plants accelerated and continued scaling down output in Nov impacted by the pandemic prevention and control, apparently weakening downstream market and the high inventory burden. The operating rate of direct-spun PFY plants decreased to below 50% before the Spring Festival, which was rare in recent years but may be hard to reduce further as many have cut production or had turnaround earlier and few plan to slash run rate further.

PET bottle chip plants have started seasonal turnaround from Nov. Units who had turnaround or slashed operation have successively resumed operation from Dec. The rest units also will gradually restart production in Jan.

PSF market has performed calmly for long and PSF plants also successively confirmed the turnaround plan. Many units will start maintenance from mid-Jan but will not last long. Most will restart operation from end-Jan.

As for the later trend, the polyester polymerization rate is expected to change little in Jan, mainly fluctuating around 66-68%, as some PFY and PSF units will have turnaround and PET bottle chip plants will resume from turnaround.

Most plants will restart operation after Spring Festival from end-Jan, but the specific schedule depends on the return of workers and some other issues. PFY plants do not face inventory burden after the rapid destocking in Dec and they may intend more to ramp up run rate. However, whether end-user demand will recover after holiday remains uncertain and orders are not very good temporarily. If the polyester polymerization rate rapidly increases in Feb, the polyester plants are likely to see mounting inventory again.

Feedstock market may be firm before Spring Festival holiday as demand is expected to grow after holiday. Downstream buyers will purchase amid strong mindset. After holiday, the actual demand movement should be highly noted.