Direct-spun PSF hitting year's low: reshaping the market 1.4D PSF

Affected by rebound of PTA and moderate improvement of sales in previous days, direct-spun PSF seems to tend stable. However, the slump of crude oil depressed the market again.

Prices of several polyester products moved close to year’s lows and the price spreads with year’s lows are within 500yuan/mt in general.

Prices of polyester products trended similarly, but there are differences in inventory and cash flow.

In terms of cash flow, only direct-spun PSF is profitable, whole other products hover around cost line.

The low inventory contributes the most to the slower decrease of direct-spun PSF than that of other product. Since the surge of polyester feedstock in Aug, direct-spun PSF plants have cut production and the operating rate once slid to 56%. In mid-to-late Oct, after risks of feedstock side decreased, direct-spun PSF plants started to restart, but the operating rate at present still stayed low.

From the perspective of yarn feedstock, the similar situation is seen. Currently PSF and VSF went close to year’s low while cotton has broken the low.

Therefore, the continuous decline of direct-spun PSF can be attributed to not only soft feedstock side but also sluggish downstream demand.

Affected by trade war and consumption downgrading, both domestic and overseas demand shrink. In addition, previous spike results in long adjustment. But after this round of adjustment, the products on the market will be repositioned and the market in the first half of 2019 will show healthy appearance.