China re-PSF market: supply and demand contradiction intensifies, O/R is low

Currently, recycled industry faces the typical dilemma---lack of feedstock. Based on the operation situation of previous years, many plants predicted previously that PET flake prices might decline in Apr, and recycled chemical fiber sales remained sluggish, especially after the second half month of Mar, so they were not active to purchase feedstock, and feedstock inventory reduced. However, with the multiple epidemic outbreaks and the long influences of epidemic in Shanghai on East China, total supply has been tight, and feedstock prices are firm.

Recycled industrial chain has apparent supply and demand contradiction, as bottle supply reduces dragged down by the epidemic and downstream demand remains sluggish. Feedstock prices get supported somewhat, but impacting the operation enthusiasm of recycled chemical fiber plants. Recycled chemical fiber plant operating rate is very low, and many plants cut production or suspend operation in Apr, and some plants start the same operation from May Day holiday.

During the May Day holiday, epidemic broke out suddenly in Jiangyin, Jiangsu Province. Jiangsu province is the largest production base of solid re-PSF in China, mainly located in Yizheng, Suqian, Jiangyin and Wujiang. Among them, Jiangyin is the largest and most concentrated area, accounting for one-third of the capacity of solid re-PSF, mainly involving solid re-PSF and down-like re-PSF. By now, most recycled plants in Jiangyin have been shut, and operating rate reduces largely. Enterprises above designated size and that under totally-enclosed management can apply for restart production later. Pay attention to the epidemic development.

Later, re-PSF plants may maintain low operating rate, and in mid-May, some plants may restart production. With the support of feedstock, producers are likely to sell under negotiation.