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Insight | Time: Feb 20 2020 3:48PM
Direct-spun PSF market recovers at a low speed
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Affected by the epidemic, direct-spun PSF plants did not restart intensively in early Feb like previous years, and they even cut production again under the pressure of high inventory and stagnant logistics. The restart time of those plants which had been shut down during Spring Festival holiday was also postponed further. At present, the operating rate of direct-spun PSF plants remained at 40-50%.

Since Feb, trading volume of direct-spun PSF increased gradually, from the one for spunlace at first to 1.4D for spinning later. But due to the large decrease of polyester feedstock, the trades of direct-spun PSF plants were mostly done with discussions and the trading price also moved down to about 6,500yuan/mt.

The trading volume was small despite moderate cash flow. On the one hand, downstream plants resumed production slowly. The operating rate of spinners was a bit higher in Fujian at 40-60%, and in other regions, it was only 10-20%. Some spinners were still in suspension. On the other hand, the logistics had significant impacts on the market. Currently the logistics within the province recovered somewhat, but trans-provincial logistics was hard to restore and the freight was high. The direct-spun PSF produced in Fujian was mainly consumed by local market, so the supply and demand there was tolerable. However, that produced in Jiangsu and Zhejiang was usually sold outward, so the inventory pressure here kept rising.

The inventory of direct-spun PSF industry averaged at 15-20 days currently. It increased at a low speed as direct-spun PSF plants ran at low rate and downstream spinners raised operating rate gradually. But after Feb 20, the run rate of direct-spun PSF plants will improve further, and at that time, the inventory pressure will show up again. Therefore, the recovery of logistics and downstream market need continuous attention.
[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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