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Insight | Time: Dec 7 2022 2:43PM  Editor:Tina Kong
Polyester filament yarn market may see slower production curtailment
 
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Price of PFY started rising since end-Nov although some downstream fabric mills and printing and dyeing plants have shut down for holiday and upstream polymerization cost gradually descended. Mainstream PFY companies continued slightly raising price or narrowed discounts. By now, price of POY has increased by near 300yuan/mt from the low in end-Nov.


Why did leading PFY producers keep adjusting up price? On one hand, PFY companies wanted to cover earlier heavy losses when many companies cut production. On the other hand, stimulated by bullish macro environment, the whole chemical fiber industry held slightly better expectation toward future movement.


Benefitted by the operation of leading PFY companies, PFY companies turned to be profitable. According to the data from CCFGroup, POY150D/48F saw 700yuan/mt of losses in the second half of Nov but began to see minor profit by Dec 6.  FDY150D/96F had near 200yuan/mt of profit by Dec 6 from suffered 300-400yuan/mt of losses.

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In addition, downstream players saw alleviated pessimism when the pandemic control and prevention policies have been eased and PFY companies continued raising offers tentatively. Some speculative demand was also boosted. As a result, sales of PFY remained good in recent days. The inventory of PFY was falling, which alleviated some inventory burden.


Actually, according to the survey made by CCFGroup, sales of some warp knitted and circular knitted fabrics slightly increased with colder weather, which may retard the holiday plan of some downstream plants. Meanwhile, downstream buyers show apparently higher intention to replenish with recovering confidence. If the price of PFY declines to their price idea, some downstream plants may restock a lot at the end of year. It was learned that sales ratio could be above 2000% in some company in Ningbo after it discounted offers for promotion on Dec 6.


PFY companies may be slower in cutting or suspending production when market fundamentals are improving periodically. Zhejiang Tiansheng's 200kt/year PFY unit which planned to shut down for turnaround in end-Nov is delayed, and the specific turnaround time has not been confirmed temporarily. Tianlong's 200kt/year PFY unit which has suspended production for maintenance earlier plans to restart in late-Dec. The operation adjustment of other PFY companies will be closely traced too.

[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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