WELCOME TO WUXI LONGSHINE TEXTILE CO., LTD.
PSF plants make up mind to keep cost amid surging feedstock
You are here: HOME » NEWS » PSF plants make up mind to keep cost amid surging feedstock

PSF plants make up mind to keep cost amid surging feedstock

Views:8     Author:Site Editor     Publish Time: 2018-08-22      Origin:Site

rice of direct-spun PSF soared since end-Jul underpinned by polyester feedstock, mainly PTA. The quick rise of polyester feedstock weighs on cash flow of PSF plants and makes them face losses. To keep breakeven, PSF plants are forced to raise offers.

This round of rise is irrational and rare in traditional slack season of downstream and can be divided into three stages obviously.

Firstly, PSF plants provide discounts and wait for downstream spinners to follow up. In late Jul, although cost of polyester feedstock increased driven by surging PTA, PSF plants mostly provided discounts for spinners to stabilize PSF price due to the traditional slack season. However, it did not keep for long. The rise of PTA was beyond anticipation, both the increment and growth rate. Cash flow of PSF plants was suppressed at a high speed and they started to be burdened with losses.

Secondly, PSF plants begin to raise offers for profit and leave out downstream spinners. Since Jul 20, PTA showed overwhelming upswing. With much higher cost, PSF suffered the narrowing cash flow until end-Jul when the cash flow moved close to cost line and PSF plants were forced to increase their offers largely. However, PTA trend moved out of expectation completely and PSF price cannot catch up the increment of cost. Thus, the cash flow hovered around cost line and even suffered losses for several days. As a result, PSF plants trapped in a dilemma. They had to increase offers for profits but gained cash flow lower than expected. With additional weak sales in upstream and downstream, sales ratio of PSF plants sustained dull and deals cannot be done on high price frequently.


Thirdly, PSF market kept unchanged for adjustment for one week after offers moved up by 300yuan/mt on Aug 4. It needed time to consume previous rise. But amid low sales season and concerns in downstream, sales ratio of PSF plants did not improve obviously and the market price did not conduct smoothly as expected. Then some large PSF plants cut production. Operating rate of PSF plants lowered quickly, indication strong determination of PSF plants to keep profits, but it remains to be observed whether it is effective as downstream peak season has not come yet.

PSF plants make up their mind to keep profits or breakeven at least. Eyes are suggested to the market continuity. The operation of PSF plants will depend on whether downstream can accept rising PSF price and polyester feedstock can keep surging firmly amid the contradiction existing in upstream and downstream.


QUICK LINK

YARN

POLYESTER STAPLE FIBER

LEAVEMASSAGE

COPYRIGHT ©  WUXI LONGSHINE TEXTILE CO., LTD ALL RIGHTS RESERVED