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Insight | Time: Jan 11 2021 3:33PM
Effect of COVID-19 epidemic in Hebei on direct-spun PSF demand
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The COVID-19 epidemic showed worsening trend since it broke out in Gaoxian and Xingtai of Hebei last week. The polyester yarn mills in surrounding Zhaoxian, Jinzhou and Gaoyi have suspended production. How much will the epidemic in Hebei influence direct-spun PSF demand on earth?

In 2020, up to 9% of direct-spun PSF consumption flew to Hebei, mainly in Shijiazhuang and Baoding.

Currently, polyester yarn mills in Jinzhou, Zhaoxian and Gaoyi all suspended production and the second round of nucleic acid testing has started. Reported by the spinners, they had few possibilities to restart before Spring Festival, and they may restart until end-Feb or even early Mar. Thus, direct-spun PSF demand was at a loss for about two months, which was similar to last Spring Festival period.

Consumption of direct-spun PSF for spinning in Hebei reached about 370kt in 2020, and Jinzhou, Zhaoxian and Gaoyi took up about 50-60% or 200kt, accounting for 4.8% of nationwide consumption.

In addition, affected by the epidemic, some spinners in other regions are possible to cut or halt production in advance. Spinners are collecting homecoming plans of migrant workers. Those who had planned to return home from late Jan originally shift the plan to mid-Jan. As a result, the operating rate of spinners will decline ahead of time and the production cut or suspension which are in end-Jan or early Feb is shifted to late Jan. For demand side, this kind of influence may be larger than that caused by shutdowns in Hebei.

For supply, there is no direct-spun PSF plants in Hebei. Those in Jiangsu and Fujian are expected to run at a high rate during this Spring Festival. Besides, downstream spinners stocked up at a large amount previously. Therefore, direct-spun PSF supply and demand face downtrend.
[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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