Direct-spun PSF: sales and inventory control remain the focus

Before the National Day holiday, due to the rise in oil prices, there was concentrated replenishment in the market, and the trading prices of direct-spun PSF rebounded to 7,700-7,850yuan/mt. Downstream yarn mills generally replenished stocks to around mid-October.

During the National Day holiday, crude oil and PX prices fell sharply, and the market generally entered a wait-and-see state. Even though traders lowered prices to 7,500-7,600yuan/mt in the two days before the market reopened after the holiday, the downstream market remained cautious, resulting in less transaction volume. PSF producers, following the market trend, gradually lowered their prices.

Although the conflict between Israel and Palestine caused some rebound in oil prices, on the first trading day after the holiday, PX, PTA, and direct-spun PSF futures still declined significantly. The major contract of direct-spun PSF struggled around 7,500yuan/mt. Basis trades increased. Plant gradually expanded the discounts and focused on selling.

Viewed from the price decline after the holiday, the decline of direct-spun PSF price was significantly smaller than that of PTA, resulting in a direct-spun PSF spread of over 1,200yuan/mt. With the purchase of PTA by Yisheng New Materials, raw material prices stabilized or even rebounded. But direct-spun PSF sellers were more willing to sell under high inventory, and direct-spun PSF spread narrowed to around 1,000yuan/mt again. Despite this, the current direct-spun PSF spread is still relatively ideal within the year, and producers have a high willingness to sell.

From the perspective of yarn mills, as some mills cut production during the National Day, the overall increase in inventory was relatively small. However, after the holiday, due to the sharp drop in raw material prices, the sales of polyester yarn were mostly average, with only a few cases mills having good orders. Therefore, in terms of raw material procurement, spinners mainly replenish feedstock at lower prices, and the willingness to chase higher prices is not strong.

Currently, polyester yarn inventory remains high, and the processing spread is in a loss state. Going forward, it is necessary to pay attention to whether there will be a phase of inventory replenishment to digest the current high inventory of polyester yarn. If the inventory is still difficult to digest in October, it is highly likely that yarn mills will engage in low-price sales to recoup funds from November onwards.

Therefore, whether from the perspective of direct-spun PSF plants or polyester yarn mills, the focus is still on sales. After all, the "Golden September" has passed, and whether there will be replenishment in October is still uncertain. Controlling product inventory will give plants more discourse power.