Direct-spun PSF prices rebound and inventory reduces

Supply restarts and oil-driven price rebounds have prompted concentrated downstream restocking and notable inventory drawdowns, yet the recovery lacks sustainable support from crude oil strength and end-user orders, keeping the PSF market in a low-level consolidation range.

Direct-spun PSF prices have trended in a low-level consolidation pattern since July. Previously halted or reduced-capacity production units have gradually resumed operation, pushing the overall operating rate of direct-spun PSF plants above 80%.

Subsequently, escalating geopolitical frictions in the Middle East drove a rebound in crude oil prices, lifting polyester feedstocks and PSF futures in tandem. Traders and futures-spot arbitragers gradually raised their prices, while manufacturers kept prices steady to prioritize inventory clearance. This narrowed the price gap between traders and factories, erasing traders' price advantages and leading to sluggish trading activity. In contrast, factory sales accelerated notably with a marked improvement in sales-to-production ratios. Beyond PSF for spinning, HC virgin PSF and low-melting PSF manufacturers also focused on destocking, achieving substantial inventory reductions.

In addition to inventory reduction in the upstream sector, downstream polyester yarn inventories also posted a phased decline. Affected by prolonged weak market conditions earlier, downstream yarn traders and grey fabric manufacturers remained on the sidelines. Stimulated by this round of phased price rebounds, downstream participants procured intensively.

The current inventory reduction is a concentrated release of downstream optimistic sentiment, as market participants judge a phased bottom after continuous price declines and full risk digestion. Nevertheless, doubts remain over a full trend reversal. On the one hand, the oil price-driven rebound lacks strong sustainability. On the other hand, despite marginal downstream improvements, overall end-user order demand is not yet robust enough to support a comprehensive market recovery. The PSF market is still trapped in a phased low-range consolidation pattern.