PFY plants have the possibility to alleviate contradiction by controlling supply in Nov to boost market confidence

Most fabric mills were cautious in purchasing feedstock when too many stocks occupied lots of working capital and pessimistic view was held toward later demand and price of the whole industrial chain. Fabric mills controlled feedstock inventory at low, so low PFY price was hard to push up procurement volume.

With the approaching of Double 11 and the Christmas, stocks of grey fabric may reduce slightly in short run, but most plants are expected to hold cautious mindset. Once orders finish, downstream plants will decide to hoard up stocks or not based on the PFY price. On one hand, supply of polyester feedstock is anticipated to rise in short run and demand may shrink when many new plants are scheduled to start operation but downstream demand will reduce affected by the Spring Festival, but the premise is that price of crude oil does not soar. Processing spread is largely supposed to narrow. On the other hand, downstream players are anticipated to cautiously lower stocks at hand amid feeble demand. Fabric mills tend to pursue low cost after capacity greatly expanded and competition intensified.

Therefore, PFY units and downstream grey fabric plants may have little time to sell in short run. Low price is hard to stimulate sales, so PFY plants have the possibility to alleviate contradiction by controlling supply in Nov to boost market confidence.