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Insight | Time: Nov 1 2019 1:32PM
Theme of PSF industry in 2019: virgin PSF squeezing re-PSF
 
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In 2018, the import ban of re-PET resulted in the rise of the cost and deprived the competition advantage of re-PSF, while in 2019, the falling polyester feedstock created cost edge for virgin PSF. In 2018, some re-PSF plants mixed virgin chips without losses when producing, but in 2019, as the polyester feedstock cost moved down further, the living environment of re-PSF turned worse.

1. Price spread of virgin PSF and re-PSF keeps narrowing.


Before Aug, the price spread of virgin PSF and re-PSF stayed in 500-1000yuan/mt, little changed with that in 2018. But after last Aug, polyester feedstock experienced a wave of sharp ups and downs, once widening the spread to 2000yuan/mt or above. Combined with the data in Jan-Oct, it averaged at 737yuan/mt in 2019 while at 1153yuan/mt in 2018, which made a part of demand for re-PSF snatched by virgin PSF. In late Oct, virgin PSF price hit below 7000yuan/mt, which shocked the high-end re-PSF products more.

In addition to the solid one, HC one showed similar performance. In 2018, price gap of HC virgin PSF and HC re-PSF mostly ranged in 500-1000yuan/mt with higher at 1500-2000yuan/mt sometimes, while in 2019, it mostly remained within 500yuan/mt. According to CCFGroup, it averaged at 337yuan/mt during Jan to Oct 2019, which at 1147yuan/mt in the same period of 2018.



2. Operating rate trends are opposite.

The operating rate of both solid re-PSF and HC re-PSF was lower than that in 2018 except for the large fluctuation during Spring Festival holidays. The operating rate of HC re-PSF was volatile within 60-70% on the whole in 2018 while mostly within 60% in 2019. According to CCFGroup, operating rate of HC re-PSF averaged at 56.3% during Jan to Oct 2019 while at 65.8% in the same period of 2018; and that of solid re-PSF was averaged at 46.7% during Jan to Oct 2019 while at 52.7% in the same period of 2018.

In sharp contrast to the decline in the operating rate of re-PSF, it was the improvement of virgin PSF operating rate. It averaged at 84.4% in Jan-Oct 2019 against 82.5% in last Jan-Oct.


Currently, the trend of virgin PSF squeezing re-PSF is only reflected in price spread and operating rate, but the volume needs to be confirmed further. Please pay close attention to China Virgin and Recycled Polyester Fiber Industry Annual Report.

[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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