Recycled PSF plants cut and stop production under power rationing, high temperature and weak market

China's national observatory continued to issue an orange alert for high temperatures on Tuesday, as intense heat waves linger in many regions of the country. During daylight hours on Tuesday, parts of Xinjiang, Shaanxi, Henan, Anhui, Jiangsu, Shanghai, Sichuan, Chongqing, Hubei, Hunan, Jiangxi, Zhejiang, Fujian, Guangxi and Guangdong are expected to experience temperatures of over 35 degrees Celsius, the National Meteorological Center said. Temperatures in some regions of Shaanxi, Hubei, Chongqing, Jiangsu and Xinjiang may surpass 40 degrees Celsius, according to the forecast.

Recycled PSF plants also face another round of intensive production cut and shutdowns, on concern about power rationing, high temperature and weak market situation.

According to our initial calculation, 17 plants will cut production or suspend operation in Aug, involving 1,550mt/d of re-PSF production, mainly located in Zhejiang and Jiangsu. The direct reason for plants in Zhejiang is that the Development and Reform Commission of Zhejiang Province issued a letter on agreeing to start C-level orderly power consumption last Saturday. Local inventory is high overall, especially HC re-PSF, mostly above one month, highly at nearly 70 days. Some plants have shut and will continue to be closed after receiving the letter. In Jiangsu, most plants cut production due to high temperature. In Sichuan, a few plants reduce operating rate recently due to power rationing and shut on Tuesday. This year, Sichuan has suffers power constraint.

Solid re-PSF production involved is 995mt/d, and HC re-PSF is 555mt/d. The lower HC re-PSF is mainly because some plants have already been under production cut previously. The plant operation may fluctuate frequently in Aug.

Currently, re-PSF plants hold cautious anticipation towards late market. Offers are mainly flat, and trading prices can be further discussed. Plants mainly focus on selling.