The Reason Why Plants Do Not Raise The Prices Is Partly Due To An Unfavorable Outlook for The Market

The reason why plants do not raise the prices is partly due to an unfavorable outlook for the market. It is already Nov, the traditional "peak season" has passed, and downstream orders are expected to gradually decline. Currently, operating rate of spinning mills still maintains, and there is pressing demand. However, if orders continue to decrease, spinners may reduce their operating rate, leading to expectations of inventory accumulation. Therefore, the main focus remains on sales to leave sufficient operational space for the future.

Secondly, the processing spread of direct-spun PSF is still acceptable, maintaining at 1,300 to 1,400yuan/mt. After the lessons learned from the devaluation in Sep, quick monetization has become the top priority.

Thirdly, the plants plans to increase the proportion of direct sales in 2025. Given the current acceptable processing spread, the feasibility of this operation increases. Additionally, looking ahead to the new capacity expansions set to come online in 2025, PTA still faces excess supply pressure, whereas there are fewer new plans for PSF in 2025, indicating a healthier supply-demand balance, which is likely to improve processing spread compared to 2024. Consequently, the operational space for the plants will grow, and its bargaining power will be strengthened.