Why direct-spun PSF prices hard to follow up?

The higher PX market drove up PTA and direct-spun PSF futures markets continually last week, and looking from the closing prices of major contract, the direct-spun PSF rose by 200yuan/mt in one week, while spot PSF prices only rose by 50yuna/mt. Spot PSF prices were dull to follow up and direct-spun PSF spread narrowed quickly to 800-900yuan/mt.

The spot prices were dull to rise, mainly dragged down by the sluggish downstream demand.

Since Nov, polyester yarn and polyester/cotton yarn inventory has been accumulating fast. Some spinning mills cut production recently due to high inventory. Therefore, spinners mainly purchase feedstock on need-to-basis, and are not willing to stockpile feedstock or chase up prices.

PSF plants also focus on selling in Nov. After the Nov 11, PSF inventory has been generally up, and despite of periodical replenishment, sales are sluggish during the most time. Therefore, direct-spun PSF inventory is at a medium or slightly high level, hard to be digested, which dampens the market confidence to raise prices somewhat.

In general, in terms of the fundamental, downstream market is weakening gradually, and lacks confidence to raise prices, especially that the price rise recently is mainly attributed to the speculation on capital. Market players hold no bullish view on the continuity.