Polyester market difficult to climb up with feeble demand superfine hollow polyester fober

Prices of polyester filament yarn plunged since mid-Sep and have declined to the low level in early-Jun when price started rising.

Sales ratio of PFY increased in recent days after polyester feedstock climbed up with slightly rising crude oil price, and price reduction of PFY slowed down, even moving up in some regions. Will PFY price end falling and start rebounding or not in later period arouses much concern.

Feedstock market
Inventory of crude oil is accumulating, hitting expectation, and price reduction is hard to stop in short run. Supply/demand pattern of PTA market is expected to improve in short run, and MEG market is stimulated by the news of MEG futures launch, while the medium-to-long term trend depends on the demand. From this aspect, polyester products lack continuous support from feedstock market.

Polyester plants
Stocks in polyester plants hit yearly high now, and the inventory burden of mainstream big plants is more apparent due to bigger capacity. The occupied capital is huge, and polyester plants are still anticipated to focus on selling.

As for the cash flow on polyester market, feedstock market witnesses worse appearance. Most polyester products are not profitable. From this perspective, downward room of polyester products is limited. In other words, big price reduction needs feedstock market to scarify certain profit margin.

Downstream demand
Operating rate of downstream market hits yearly low now on sharp up-and-down of feedstock market and in order to deal with inventory devaluation. Operating rate of twisting units and weaving plants in Zhejiang and Jiangsu is much lower than the same period of past years. End-user demand is largely soft now.

Grey fabric plants see moderate profit now on falling PFY price based on the survey CCFGroup made, and inquiries increase, but actual order placement is not optimistic with continuous decreasing prices. Thus, end-users are mainly cautious in purchasing feedstock, and PFY plants still face big difficulty in lowering stocks. In short run, price reduction of PFY may be slower or is supposed to be in correction in anticipation of slightly better feedstock market atmosphere. PFY plants are expected to focus on destocking. It is also normal to see run rate slash under losses and high stocks. In medium run, demand is expected to be hard to surge before the Spring Festival, and slight improvement may be hard to push up overall PFY price when inventory is high now. Weak feedstock market and the contradiction of supply and demand is still supposed to dampen overall industrial chain.