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Insight | Time: Nov 7 2019 10:57AM
Direct-spun PSF: Opportunities outweigh risks
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Since direct-spun PSF declined below 7,000yuan/mt and hit year’s low, the market has tended flat and the price has been volatile within 6,800-7,000yuan/mt.

In terms of price, it stays at low level in recent years.

Currently, direct-spun PSF price has returned to the level in 2016. From the chart above, it can be seen that 7,000yuan/mt is a threshold for direct-spun PSF. Therefore, it moved close to 7,000yuan/mt several times this year but did not break through completely.

Although direct-spun PSF price is below 7,000yuan/mt, from the perspective of polyester industry chain, all the products from PX to polyester yarn hover around cost line or only can gain thin profits, thus there is limited downward room. Therefore, it will hardly move to the bottom in 2016. On the contrary, once favorable news about crude oil, polyester feedstock or macro market appears, the market conduction will be very rapid.

Even so, market fundamentals are soft now. Polyester feedstock side faces pressure of inventory accumulation, and downstream spinners put a priority on destocking and funds recouping, and they mostly replenish for rigid demand with a small amount of raw material stocks. The stockpiles of traders are also at a low level in general. 

However, because of this, once favorable stimulation appears, the energy of the market will fully show. Therefore, moderate attention can be paid to direct-spun PSF market. 
[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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