Direct-spun PSF inventory reduces with low prices

Recently, crude oil and polyester feedstock prices fluctuate downward, and direct-spun PSF prices follow lower. PSF Jan contract once declines to around 7,040yuan/mt, approaching the low level in the year.

This year, PSF futures market has dipped below 7,000yuan/mt twice, once at the beginning of the year and once in the middle of the year. Recently, as the price gradually approaches 7,000yuan/mt, market attention to the low point increases. Last Friday on Dec 8, downstream buyers concentrated on replenishing feedstock, resulting in increased trading volume. PSF has also seen a continuous trend of destocking for two weeks.

As direct-spun PSF prices continued to decline in Nov, direct-spun PSF held by spinners and traders was generally scarce. The two recent intensive replenishment also indicated recognition of the undervalued PSF. However, the market still lacks confidence in chasing price increases.

Downstream orders have continued to weaken, and production cuts are further increasing. Inventory levels remain high. Therefore, the destocking of PSF is considered a temporary market situation, and its continuity is not optimistic.

However, for PSF plants, the pressure on inventory has eased, and the processing margins are still acceptable for now. There is no intention of reducing output in the short term, ensuring a relatively stable operating rate in Dec.