Recycled PSF market likely to consolidate in short term

-Close virgin re-PSF prices remain range-bound, with transactions mostly concluded via negotiation amid soft demand and stable supply.

-HC re-PSF price decline has slowed since late May, with siliconized grade at ~6,000yuan/mt, as producers cut runs to ease inventory pressure.

-The overall recycled PSF market lacks clear price drivers and is expected to continue consolidating in the short term, with spot deals reliant on negotiation.

The recycled PSF market has been largely consolidating recently. However, close virgin re-PSF and HC re-PSF markets show divergent trends in trading, production and pricing.

Close virgin re-PSF prices have remained range-bound. Most manufacturers keep their offers steady, although some previously high offers have been adjusted downward. Transactions are mostly concluded through negotiation. Operating rates have remained stable overall, but some producers report slower sales and rising inventories, though current stock levels are lower than the same period in previous years. Even high-quality products are seeing weaker sales. Only a few producers hold orders covering 15 to 20 days. The price gap between virgin PSF and recycled PSF remains wide. Given limited downside for virgin PSF and ordinary supply of recycled feedstocks amid the rainy season, close virgin re-PSF prices are expected to continue to consolidate in the short run, with deals settled via negotiation.

In the HC re-PSF market, the pace of price decline has slowed notably since mid-to-late May. After successive corrections, the after-tax price of siliconized HC re-PSF stands around 6,000yuan/mt, with low-end prices at 5,800-5,900yuan/mt, merely 100-200yuan/mt above the year's lowest level. To ease inventory pressure, manufacturers have cut or suspended production since May, showing little willingness to reduce prices further. Demand stays sluggish amid loose supply and demand, and producers choose to digest inventories gradually.

Overall, recycled PSF lacks clear price drivers. Close virgin re-PSF prices fluctuate weakly due to soft demand, and HC re-PSF price decline has slowed down. Affected by weak rigid demand, divergent inventory situation and cost support, the whole market is expected to keep consolidating, and spot transactions will rely on negotiation.