PFY plants may face high cost and huge losses pressure

On the other hand, MEG price soared and polyester feedstock market is expected to be in upward consolidation, which rendered downstream sectors to show higher buying interest. PFY sales improved on Dec 17, and the average sales ratio was assessed to 170-180% till P.M.5:00. Stocks of PFY declined again, and inventory of POY, FDY and DTY was medium-to-low. Some plants even sold out.

In short run, PFY plants may face high cost and huge losses pressure. With inventory burden, PFY plants may choose to raise price to reduce deficit. Thus, price of PFY is supposed to enjoy support in short term. Meanwhile, downstream fabric mills and twisting units are expected to shut down for holiday soon, and most restocked to guarantee the production before the Lunar New Year, mainly able to ensure production in end-Dec or early-Jan. Most downstream plants are cautious in replenishing now, and the price increase will affect the purchasing volume of feedstock prepared for the production after the Lunar New Year holiday. Downstream plants’ mindset and orders before the Spring Festival should be further concerned.

Except for the influence on PFY price, polyester plants may also put turnaround plan ahead of schedule, which will be tracked later.