Direct-spun PSF may spike to 8,000yuan/mt with strong costs and gas supply restrictions

Direct-spun PSF plants cut production intensively due to the news of Reliance’s PX plant maintenance and gas supply restrictions in Jiangyin. From Saturday, offers from producers tick up by 200-400yuan/mt generally. Semi-dull 1.4D talking prices move up to 7,600-7,800yuan/mt, highly at 7,900-8,000yuan/mt.

The rebound of direct-spun PSF prices is partly due to the low PSF spread previously.

Spot PSF prices continue to weaken last week, and PSF spread once reduces to 600-700yuan/mt, reaching a new year low. Plants in Jiangyin cut production intensively, with a capacity of about 450kta, taking a share of 5% of total PSF capacity. Operating rate of PSF lowers to below 80%.

In addition to the own market, the news of Reliance’s PX plant maintenance and strong PTA gives support for the uptrend of direct-spun PSF. PTA Jan contract has risen by 5.5% Monday, and basis reaches 1,000yuan/mt. PTA spread expands to above 800yuan/mt.

Viewed from downstream market, polyester yarn sales improve stimulated by higher feedstock and inventory reduces. Some prices go up moderately.

In short, direct-spun PSF market may remain firm, and prices are likely to reach 8,000yuan/mt.