Virgin PSF prices go lower, PET flakes prices move to a high

PTA and PSF futures markets decrease recently, and polymerization costs has moved lower to 6,644yuan/mt on Jul 10. Coupled with ordinary downstream market performance, traders sell spot PSF at low level. Semi-dull 1.4D PSF talking level is around 7,850-7,950yuan/mt ex-works or short-distance delivered, and prices from traders are slightly lower to 7,650-7,800yuan/mt ex-works. HC virgin PSF offers also lower by 100yuan/mt partly, mainly at 7,950-8,500yuan/mt after-tax ex-works.

Meanwhile, recycled PSF offers are mainly flat. PET flakes have reached a new high. In Yangzhou of Jiangsu Province and Anhui Province, some cold washed flakes have been at 5,700-5,800yuan/mt pre-tax delivered.

Currently, prices of cold washed flakes and hot washed blue and white flakes in Zhejiang and Jiangsu have been higher than the same period of last year, and some players worry that if virgin polyester prices move down largely, recycled PSF market may face more changeling situation.

For late market, in short run, virgin PSF market is in weak adjustment, and recycled PET market is mainly in a sideways. In the second half of the year, polyester market is likely to move up first and then decline. In Aug-Sep, the traditional peak season for polyester market will come. PTA inventory accumulation pressure is not large, and MEG inventory may be hard to pile up obviously. Periodical rise of prices may be expected. in addition, crude oil prices are supposed to be firm in the third quarter due to the busy travel season in the United States, while in the fourth quarter, prices may move down. Therefore, recycled PSF prices have upward space in the third quarter, and in the fourth quarter, the price spread between virgin PSF and recycled PSF may narrow.

In general, the market situation this year is similar to last year. Good performance is expected before the New Year holiday, but demand fails to reach the expectation after the holiday. Under the strong expectation and weak reality, the prices move down. In the third quarter of 2023, recycled PSF prices moved up due to tight feedstock supply and higher virgin PSF prices, and the market was plain in the fourth quarter. The differences are seen below:

1. PET flakes prices move up in Jul 2023, but the prices have started to rise in Jun this year;

2. Recycled PSF new capacity expansion continues this year, and the market is more oversupplied;

3. In May-Jun 2023, many plants cut production or suspend operation, but this year, operating rate is generally high, facing more severe competition.