PFY market faces increasing pressure: FDY production may be first to be cut

Recently, some DTY plants and fabric mills have started controlling run rate due to the pressure from sales and inventory. Some enterprises cut production, including DTY plants in Taicang, warp knitting mills in Haining and water-jet mills in North Jiangsu.

The operating rate of downstream plants tends to peak and the durability of run rate on downstream market should be concerned later, especially the run rate when earlier low-priced feedstock being used up. If orders remain weak, the operating rate is likely to accelerate falling, especially after the Qingming Festival and May Day holiday.

Most downstream buyers continue purchase PFY on a need-to-basis due to weak orders and in expectation of reducing feedstock price. The PFY stocks of downstream players keep falling. A new round of intensive procurement is estimated to appear this week. PFY companies are likely to discount offer for promotion later. Downstream buyers may restock to cover the pressing demand again when they just need to replenish.

Prices of PFY have kept inching down for a month and a half and may be easy to fall but hard to rise with poor downstream demand and high operating rate and inventory in PFY plants. Price of FDY has reduced to be lower than the low level in end-2024 while that of POY has been close to the low level at the end of 2024.

After price dropped, the profit of PFY per metric ton has been squeezed continuously. Fine denier FDY has been unprofitable for a long period and the losses have been intensified, and the high profit of POY also kept shrinking.

The inventory of PFY continued rising and current inventory has been flat with the same period of last year. The inventory of FDY has been apparently higher than the same period of last year.

PFY market has been deteriorating now. Whether downstream demand will improve further in April should be concerned. Otherwise, the industry will face increasing pressure. FDY plants may be the first to cut production to prevent price from falling.