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Insight | Time: Sep 25 2019 11:18AM
Views on direct-spun PSF market before and after National Day
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After Mid-Autumn Festival, direct-spun PSF has experienced a period of sharp ups and downs. Currently, it returns to fluctuate within 7,000-7,500yuan/mt.

During previous surge, the market seemed calm-buying moderately at low price and staying on the sidelines at high price. Then with the slump of polyester feedstock, direct-spun PSF was discounted for sales after staying high only for three days. It completed the process from rise to fall within one week.

For coming National Day, there are divergences on the market, but participants agree that there is restocking demand before the holiday as the transportation will be affected during the holiday, but considering external uncertainties, the restocking will be limited.

The overall demand from producers in South China and North China also differs. The market in southern China has been more vigorous than in northern China since Aug. Especially in Fujian, polyester yarn sales improve and the price moves up with inventory lowering within 10 days. Currently, the spinners mostly run at full capacity and have no plans to cut or suspend production during National Day holiday. In North China is mainly polyester/cotton yarn. Its inventory ranges in 2-3 months previously, showing large pressure despite small decrease recently. Some spinners intend to take holidays to reduce inventory pressure.

Besides, direct-spun PSF plants control price differently due to the mixed operation later. For example, some plants in Fujian plan to cut or suspend production later, so their offers are slightly higher than that in northern China in order to keep inventory for later use. In Jiangsu and Zhejiang, the spinners mostly raise operating rate and run at full capacity to the greatest extent, so they focus on selling recently and provide discounts in trading.

The pattern of strong South China and weak North China will sustain in Oct combining upstream and downstream.

As things stand, the decline of direct-spun PSF price is expected to slow down later supported by low inventory and cost after recent adjustment. Considering the weak restocking before National Day, direct-spun PSF inventory will rise gradually. If there is no favors during National Day holiday, direct-spun PSF price will slide again after the inventory pressure increases and some plants may cut production again. As a consequence, the demand will keep weak and be hard to improve in Oct, and the price will stay volatile within 7,000-7,500yuan/mt.
[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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