Recovering profit deserves anticipation on polyester filament yarn market

Sep and Oct are traditional peak season for textile market. The operating rate of DTY plants, fabric mills and printing and dyeing plants and sales have improved since Sep.

According to the statistics from CCFGroup, the operating rate of DTY plants, fabric mills and printing and dyeing plants started increasing from early-Sep, which as ascend by around 10% from 76%, 68% and 72% respectively in early-Aug to current 83%, 77% and 81% respectively.

In terms of sales and inventory of grey fabrics, sales of fabrics for autumn and winter apparels improved from early-Aug and sales of velvet fabrics for home textiles also grew. Peak-season atmosphere was seen on grey fabric market, especially domestic sales.

Sales of some grey fabrics were hot recently based on the survey made by CCFGroup. Sales of warp-knitted austenite fabrics remained good in Haining and sales of other products also grew. In Changshu, sales of rabbit plush velvet (PV velvet) and milk yarn 120D improved too, those of flannel and coral fleece remained weak and those of circular knitted jacquard fabrics kept sound. In Wujiang, sales of water-jet high-density polyester taffeta and pongee were good and those of cotton-like fabric and T400 were sound too. Sales of circular knitted terry fabric were good in Shaoxing and those of silk dralon fabric rose.

Grey fabric plants saw meager profit and faced pressure to recoup capital, but sales of grey fabrics have improved recently. Current inventory of grey fabric was lower than the same period of end-Aug/early-Sep in 2021-2022, up by around 9 days compared with early-2023 and down by 1-2 days from the peak in early-Aug.

As for supply of PFY, some units may scale down or suspend production recently, mainly because the Asian Games in Hangzhou will affect the normal operation of plants in Xiaoshan, Hangzhou. Around 2.91 million tons/year of PFY capacity will be cut or suspended production from late-Sep to early-Oct, accounting for 3.7% of the total polyester capacity and taking up 6.9% of direct-spun PFY capacity.

PFY market is estimated to see shrinking supply but growing demand in short run. PFY plants may see not large inventory burden temporarily, with inventory of POY and FDY shivering around as low as 12-15 days. The later pressure from new units is supposed to be much smaller than the first half of year (only two direct-spun PFY units each with 300kt/year of capacity are scheduled to start operation in the rest of 2023). Therefore, price of PFY is expected to be easy to increase but hard to reduce. Recovering processing spread and profit deserve anticipating.