How will direct-spun PSF perform in short run?

Direct-spun PSF tends mild recently after a period of sharp rise and fall.

Last week, direct-spun PSF rallied from the bottom supported by the rise of crude oil and polyester feedstock, which attracted downstream spinners and traders to replenish intensively and thereby improved the sales and the prices of direct-spun PSF further. Currently, PSF spread stayed in low territory under high feedstock costs. It once dropped below 1,000yuan/mt.

The production of direct-spun PSF was contracted more with the operating rate lowered within 80%. However, affected by Covid-19 pandemic, the demand remained sluggish and the inventory of polyester yarn and polyester/cotton yarn was in continuous accumulation which accelerated especially in Mar.

Though direct-spun PSF plants make efforts to reduce production in order to keep balanced supply and demand, the market is still dragged by bearish demand. In addition, some spinners have decrease their run rates due to the pandemic.

In short run, direct-spun PSF will keep volatile in narrow range amid cost support and soft demand. In mid-run, PTA side will continue to lend support to direct-spun PSF market due to low PX-PTA spread and operating rate. It is suggested to focus on the trend of crude oil.