Recycled PSF prices still have further downward space

This week, recycled PSF prices continue to decline. Close virgin PSF and HC re-PSF offers in Hebei lower by 100yuan/mt, and prices of HC re-PSF in Zhejiang and Jiangsu also tick down. Close virgin PSF offers are mainly flat, and trading prices can be negotiated with discounts, in Shandong, sales are ordinary and can be discussed. In South China, prices are relatively firm with a slower decline. The overall market is in a sluggish negotiation pace. Dragged down by the recycled PSF market, some PET flakes prices decline by 50-100yuan/mt.

In 2022, affected by the pandemic, the market in Nantong Dieshiqiao was bleak from March to April, only recovering around April 24-25. Demand recovered in 2023, and logistics were busy. On the eve of the 2024 Spring Festival, the modern international logistics park in Dieshiqiao was bustling with express and logistics companies. It's reported that the daily volume of parcels increased by around 10% compared to usual, but orders after the holiday were lower than expected. Some Nantong traders indicated that starting from Feb 21, downstream orders were insufficient, and there were more returns due to new regulations on express delivery, leading to some businesses being unwilling to promote, resulting in weaker business in March compared to the same period last year.

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The Ministry of Transport announced the newly revised "Regulations on the Administration of the Express Delivery Market", which took effect on March 1, 2024. The revised regulations mainly focus on strengthening the regulation of express delivery service behaviors, enhancing requirements for market order management, and strictly regulating the management of express delivery waybills and codes in seven aspects. Among them, it is stipulated that to ensure the safety of parcels, prevent parcel loss, damage, or shortages, parcels must not be thrown or trampled on; without the user's consent, parcels must not be confirmed received on their behalf, and parcels must not be delivered to smart parcel lockers, express service stations, and other terminal facilities without authorization.

Looking ahead, the overall expectation is weak, with further downward space for recycled PSF price, weighing on PET flakes prices. With the continuous entry of new recycled capacity, market competition is becoming more intense, leading to cash flow compression for factories.