Recycled PSF market waits for peak season

In mid-Aug, downstream market has not improved yet. Some distributors in Nantong even claim that the situation is worse than in Jul. It seems that this year hasn't been going too well. Looking at the Dieshiqiao Home Textiles Index, the trend is indeed alarming, especially the Prosperity Index, which has been consistently declining. The market is normally improved somewhat in Jul, but this year, the index has set five-year new low. The Purchasing Managers' Index has shown some slight improvement, but it still remains at the lowest level in nearly five years.

In Jul 2023, the Dieshiqiao Home Textiles Prosperity Index was 91 points, a decrease of 1.1% compared to the previous month. Among then, the 50 Business Index was 100 points, a decrease of 2.9%; the Production Prosperity Index was 92 points, a decrease of 2.1%; the 50 Producer Index was 96 points, a decrease of 2.0%; the Market Prosperity Index was 93 points, a decrease of 1.1%; and the Purchasing Managers' Index was 96 points, an increase of 3.2%.

Driven by costs, some manufacturers of HC re-PSF in Jiangsu, Zhejiang, and Anhui have raised their prices recently, and lower prices tick up. Sales diverge in general, which are moderate in Hebei, Shandong, Fujian and Henan, while ordinary in Nantong, Jiangsu and Zhejiang. HC virgin PSF is sold under negotiation and sales are moderate, with better cash flow than HC re-PSF. The end of the back-to-school season is approaching, and the traditional peak season and e-commerce sample production are starting.

 Close virgin PSF prices are relatively firm in Hebei and Northern Jiangsu and some plants have no inventory. Prices in Wujiang and Jiangyin are mostly stable, with some high inventory levels. The direct-spun PSF spread has widened, and traders have replenished intensively last week, performing overall better than PTA. Since Jul, polyester yarn inventory reduces somewhat, but overall, it still remains at a high level, with inventory levels slightly higher for about a month, while polyester/cotton yarn performing weaker than polyester yarn.

In summary, recently, driven by costs, some recycled PSF offers have increased, and sales diverge overall. Producers have a cautious outlook on the future market. Currently, the demand for home textiles and yarn is ordinary, and the market is still awaiting the peak season.