What will the sharp volatility bring to PSF?

PSF has moved all the way down since mid-Jun amid the decline of crude oil and recession of demand, with PSF futures dropping from above 9,000yuan/mt to below 7,000yuan/mt with a decrease of 2,400yuan/mt and spot PSF sliding less by 1,400yuan/mt due to low inventory. Thus, the gap between spot PSF and PSF futures gets increasingly wide.

Recently, PSF futures rebounded to over 7,000yuan/mt, triggering intensive downstream restocking, but spot PSF was hard to rise and the higher offers were reluctant to be accepted by buyers. At present, the concerns about the high prices were alleviated, but the market fundamentals changed little.

The inventory of both polyester yarn and polyester/cotton yarn reached years’ high and the spinners cut production successively. The operating rate also moved to the low. Overall downstream orders stayed in sluggish territory.

As for PSF plants, the inventory was at a low level in the year. If the demand remains poor, PSF inventory will accumulate and exert more pressure under the increase in operating rate.

Direct-spun PSF market fundamentals now still fluctuate along with raw materials. After previous sharp rise and fall, it is likely to step into rangebound. It is also waiting for the changes in and outside the industry.