Recovery progress of polyester and downstream markets after the Lantern Festival

The Lantern Festival (The 15th day of the first lunar month, which was on Feb 12 this year) has passed, and workers are returning to their jobs. Currently, the polyester market is focused on the operating rates of various polyester products and the recovery of downstream operation.

From the perspective of polyester products, most facilities have either restarted or are in the process of restarting. By February 14, the polyester polymerization rate has recovered to around 86.2%. Specifically, the operating rate for direct-spun polyester filament yarn, staple fiber and PET bottle chip has recovered to approximately 90.1%, 81.3% and 74.2% respectively.

Compared to the same period in previous lunar years, the recovery of polyester polymerization rate and that of PSF is relatively neutral, aligning with the five-year average; however, the recovery speed for PFY is faster, exceeding the five-year average by nearly 9 percentage points, while the operating rate for PET bottle chip remains low, at an absolute low level for the past five years.

The polyester polymerization rate may be near 90% by end-February/early-March.

In terms of downstream market, the recovery speed of run rate is normal and the restore of printing and dyeing plants is relatively better.

Operating rate of DTY plants increased to 59% in Zhejiang and Jiangsu, at 70% in Xiaoshan and Shaoxing, around 80% in Changxing, below 70% in Taicang, at 40% in Changshu and around 40% in Cixi. Operating rate of fabric mills rose to 53%in Zhejiang and Jiangsu: around 70% for water-jet mills in Wujiang, around 80% in North Jiangsu, near 40% in Changxing; the run rate of warp knitting plants was near 70% in Haining and around 20% in Changshu. The run rate of circular knitting plants in Xiaoshan and Shaoxing from Zhejiang and was at 30-40% and below 20% in Changshu, Jiangsu. Operating rate of printing and dyeing plants increased to 69% in Zhejiang and Jiangsu: at 70-80% in Wujiang, above 70% in Xiaoshan and Shaoxing, around 80-90% in North Jiangsu and around 60% in Haining and near 50% in Changxing. The operating rate of polyester spun yarn plants recovered to 64%.

Compared to the five-year average for the same lunar period, the operating rate of DTY plants is slightly weaker, that of fabric mills is basically flat, and that of spinning and dyeing plants is somewhat better. The operating rate of printing and dyeing plants is relatively high, with factories in the dyeing hubs of Shaoxing and Wujiang quickly ramping up production after the holiday, primarily due to the timely delivery of orders placed before the Lunar New Year.

Currently, the downstream operating rates have not yet returned to normal and are still in recovery. It is preliminarily estimated that next week's operating rates will return to relatively normal levels, with the overall recovery pace similar to last year. The operating rate of DTY plants, fabric mills, printing and dyeing mills and spinners in Jiangsu and Zhejiang is preliminarily expected to recover to below 90%, 70-80%, around 80% and slightly below 70% respectively. Future increases in downstream operating rates will depend on order strength, which is currently relatively weak. However, it has been heard that some factories in certain areas plan to delay reopening. As a result, the peak operating rate after the Spring Festival may be worse than 2024. During the peak demand period from March to April 2024, the highest operating rate for DTY plants, fabric mills, printing and dyeing mills and spinners in Jiangsu and Zhejiang were at 94%, 83%, 90% and 73% respectively.