Re-PSF prices more inclined to rise with tight feedstock supply

PET flakes supply is very tight this year. Previously, the rainy weather in Guangdong intensified the feedstock tightness, and cold washed flakes prices rose to 5,500yuan/mt pre-tax, the highest level nationwide. Then after that, the replenishment of feedstock inventory in recycled chemical fiber plants becomes a more prominent problem. In previous years, plants with strong strength in Zhejiang mostly have above one month or even two months of feedstock inventory, but this year, the feedstock inventory in some plants is only around one week, lower in Guangdong plants. If the traditional peak season comes and some plants run at full capacity, the feedstock supply may be tighter.

This year, feedstock prices fluctuate limitedly, and supply is still not large till Aug. Moreover, the price difference between hot washed blue and white flakes and PET fiber chip is at around 1,000yuan/mt, and re-PET feedstock still has upward space.

Recently, driven by higher virgin PSF, recycled chemical fiber prices tick up partially. Some producers with low inventory raise the prices, and other producers focus on selling. Re-PSF inventory in Hebei, North Jiangsu and Guangdong is relatively low. Both feedstock and product inventory reduces overall. Later, pushed by costs, recycled chemical fiber prices are easy to rise and hard to decline.

Currently, virgin polyester product prices are range-bound at high level, and there is still certain price difference with recycled polyester prices. The price difference between solid virgin PSF and solid re-PSF is around 1,000yuan/mt, and that of HC virgin PSF and HC re-PSF enlarges by 500yuan/mt from early 2023 to around 800yuan/mt. Polyester product prices fluctuate following the cost side.

In general, with the tight feedstock supply, recycled PSF prices are easy to rise and hard to decline.