Direct-spun PSF market lackluster amid slow demand pickup

Direct-spun PSF market remains in a low consolidation during the traditional peak season in mid-Aug.

Looking from the downstream market, there is slight improvement in Aug compared to Jul. Polyester yarn and polyester/cotton yarn inventories generally reduce, but the reduction is not obvious. Currently, yarn inventory remains at a high level, which is one of main factors restraining spinners from purchasing raw materials.

Suppressed by high inventory, the operating rate of yarn mills has been hovering at a low level (second only to the period around the Spring Festival) this year, with no signs of improvement or increase for the time being.

Feedstock market also sees no positive impetus. Though PTA processing spread narrows to 100-200yuan/mt in Aug, and some plants start to cut production, the PTA market continues to go downward weakly, and there are still concerns over the supply pressure in Sep.

For direct-spun PSF, operating rate is at a high of above 90%, and inventory is around half a month, with acceptable pressure overall. But there are slight differences among varieties. HC virgin PSF and low-melting PSF inventory is higher, mostly at 15-30 days, partly higher above one month. For solid virgin PSF, plant inventory is generally at one to two weeks, and some plants pre-sell products.

Despite the slow improvement in end-user demand, expectations for a market recovery still persist. However, there is caution regarding the strength and duration of this recovery.