Recycled PSF prices continue to hit new lows

On Monday, U.S. Treasury yields plummeted across the board after President Trump stated that his proposed policies could impact U.S. economic growth and did not rule out the possibility of a recession, triggering a surge in the market's fear gauge and igniting risk-off sentiment. U.S. stocks suffered a sharp decline, with the Nasdaq closing down 4%, its biggest drop in over two years. Oil prices were also impacted by market sentiment, as concerns that U.S. tariff policies would slow global economic growth and reduce energy demand pushed both benchmarks back to six-month lows. WTI crude oil plunged during U.S. trading hours, following risk assets, and ultimately closed down 1.72% at $65.71 per barrel. Brent crude oil also fell below the $70 mark again, closing down 1.72% at $68.98 per barrel.

The recycled market has been in a continuous decline since the Spring Festival holiday, with a concentrated drop in recent days. New lows are constantly being broken, and in some regions, low prices continue to go lower. In Hebei, Jiangsu, and Guangdong, the lowest prices for HC re-PSF have fallen to 6550-6700yuan/mt, after-tax ex-works. In Hebei, prices of HTLS close virgin PSF and HC re-PSF are similar.

On Tuesday, virgin PSF prices hit a low of PF05+20yuan/mt, near 6,640yuan/mt, approaching the price of close virgin PSF. Demand for conventional close virgin PSF and high-end close virgin PSF was weak, with orders generally insufficient. Some offers of HC virgin PSF also dropped by 100yuan/mt to 7,300-7,700yuan/mt, after-tax ex-works, partly lower at 7,250yuan/mt, which was the same as the high-priced HC re-PSF. Prices have been constantly decreasing, while plants that shut down during the Spring Festival holiday face less inventory in comparison. In addition, the PET bottle chip and PET fiber chip prices also declined to below 6,000yuan/mt on Tuesday, which caused concerns among PET flake suppliers.

Currently, there is still room for virgin PSF to decline. Insufficient downstream orders, coupled with a small price difference between virgin and recycled PSF, are putting pressure on recycled PSF prices, and a continued weak price outlook is expected. If the situation does not improve, and product inventories continue to accumulate, plant production cuts or shutdowns cannot be ruled out.