Re-PSF: some prices retreat to pre-holiday level

With weaker demand than anticipated and sharp fall of virgin PSF, part of re-PSF producers lowers the offers or provides discounts to sell. Some prices have declined to pre-holiday level. The current market situation:

1. Sales are unsmooth. Chinese local demand is ordinary, and export orders see no improvement (some plants reflect that there are no export orders for socks and sweaters). Some plants continue to conclude previous orders, and new orders are inadequate after the Spring Festival holiday. Downstream buyers purchase for pressing demand. Market transactions are thin overall recently.

2. Though PET flakes prices lower by 100-200yuan/mt partially, the supply remains tight.

Some plants reflect that the “good start” after the holiday is too short. In Jiangyin of Jiangsu Province, some plants even say that plants that restart earlier intend to cut operating rate. If the inventory keeps accumulating and downstream demand sees no improvement, re-PSF plants are likely to cut operating rate or suspend operation in late Mar and Apr.

While, the consolation is that the fundamental of polyester feedstock market is tolerable, and polyester operating rate may climb up further later. Pay attention to the orders in Mar and Apr. For re-PSF, the downward space may be limited with the support of costs, and the market mainly concerns about the inadequate orders, which makes market confidence lack. Keep an eye on the downstream demand.