Polyester yarn is more resistant to the decline

Polyester yarn is more resistant to the decline. Most polyester yarn mills hold pre-sale orders which could last to early Nov. However, the demand is bearish now. There is no large difference for the spinners to offer 13,500yuan/mt or 13,800yuan/mt, so they do not lower prices so actively. Then the product inventory of polyester yarn increases quickly. Downstream weavers reported that the orders were far worse than the same period last year. This wave of rise in late Sep to early Oct was mainly driven by orders for“Double 11 (Nov 11)”shopping day. Apart from the actual demand, there was also speculative demand spurred by electricity restriction and production cut and the rise of raw materials. However, after the price rose high, buyers turned reluctant to accept it. Then raw materials dropped so quickly out of expectation and the market participants started to stand on the sidelines thereby. Some believed direct-spun PSF would rebound later amid tight supply and high price of crude oil. Nevertheless, PTA plants now run at over 80% and the processing spread is high within 700-800yuan/mt, so it has downward room. Direct-spun PSF will be hard to change current weakness and polyester yarn will continue to retreat. Later, downstream weavers will focus on consuming stocks and polyester yarn will step into weakening territory, both price and trading volume.