More polyester downstream plants suspend production in panic

Theoretically, PFY plants are expected to consider cutting price in late-Jul to stimulate downstream procurement after sales remained dull since Jul. But with high cost, FDY plants have suffered losses, and the operation space is limited. The polyester polymerization rate has been decreasing, down to 88.3% by last Friday. In addition, according to the earlier research, the feedstock prepared in downstream plants can guarantee production of downstream plants after Jul 20, but panic mood escalates greatly after PTA futures hit limit down for consecutive 2 days. Downstream plants that used up feedstock inventory accelerate suspending production. Based on the statistics of CCFGroup, the operating rate of polyester end-users declines rapidly in Zhejiang and Jiangsu in recent period, with run rate of twisting units and fabric manufacturing plants at 73% and 63% respectively, down by 17% and 16% respectively compared with the high level in end-Jun. After the feedstock purchased being used up, production suspension of downstream plants is expected to intensify.