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Insight | Time: Feb 19 2020 10:39AM
Recycled market pays close attention to virgin polyester market
 
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China's private enterprises burden 87% of employment in urban. Though the recovery of plants’ operation is tough, logistics has been in slow recovery recently, and plants are preparing for the resumption. Currently, the recovery situation of recycled chemical fiber plants is showed below:
Regions Recovery of plants Remark
Hebei and Shandong Most plants wait to restart production, and small orders are delivered  
Jiangsu Some plants get the approval to restart operation, and some plants plan to resume operation recently Pay attention to virgin PSF price
Zhejiang Three plants have restarted production, and in Cixi and Hangzhou, many plants have been approved to resume operation Some plants are getting the approval
Guangdong One plant has restarted operation Other plants wait for the workers and feedstock
Fujian Lack of workers and feedstock  
Sichuan and Chongqing A few plants plan to resume operation earliest this Friday  


In Zhejiang, some plants have got the approval from the local government to restart production recently, but plants may not resume operation, due to lack of workers and feedstock. Besides, on concern about the weak demand and tight feedstock supply, some plants with product inventory only sell products recently.

Then, how about the offers?

On one hand, PET flake market is almost still closed, and most plants have not restarted production, so there are basically no PET flake prices on the market. Besides, PET flake supply is originally tight before May. On the other hand, most recycled chemical fiber plants have not restarted operation, and no mainstream prices are formed. The lower virgin polyester prices put pressure on recycled market. Take 1.4D direct-spun PSF as an example.
Product Mainstream price on Jan 17 Mainstream price on Feb 17 Remark
1.4D direct-spun PSF 6900-7000yuan/mt 6400-6600yuan/mt Limited transactions, and prices are lowly at 6,500yuan/mt for big orders
HTLS close virgin PSF in Jiangsu 6300-6600yuan/mt ? Higher prices in Hebei


Currently, virgin PSF prices have declined to the pre-holiday level of HTLE close virgin PSF in Jiangsu, and producers are hard to offer prices.

Related factors for reference:
1. PET fiber chip: small volumes are transacted, and SD PET fiber chip is partially offered at 5,900-5,950yuan/mt by cash. Some deals are concluded at 5,900yuan/mt by cash, or delivered. Big orders can be negotiated.

2. PET bottle chip: trading sentiment improves slightly, and mainstream level is traded at 6,150-6,200yuan/mt ex-works..

3. 1.4D direct-spun PSF prices hold flat, and pay attention to the prices after the operating rate climbed up after Feb 20.

4. Some big HC re-PSF plants in Hangzhou maintain the offers before the holiday.

In addition, foreign orders are also influenced much. Some downstream plants have required to deliver the goods from Feb 1, but the logistics is restrained.
[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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