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Downstream buyers presented cautious mindset after sharp up-and-down of PTA futures
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Downstream buyers presented cautious mindset after sharp up-and-down of PTA futures

Views:0     Author:Site Editor     Publish Time: 2019-07-16      Origin:Site

Downstream buyers presented cautious mindset after sharp up-and-down of PTA futures, showing stronger risk aversion awareness when stocks of feedstock and finished goods were high. Currently, most downstream plants concentrated on digesting feedstock purchased before and tried to minimize feedstock procurement. Some downstream plants that had low feedstock inventory at hand even considered to cut run rate or shut down temporarily, waiting for the reduction of feedstock price. According to the research made by CCFGroup, the feedstock prepared in downstream plants could mainly guarantee production after Jul 20. Sales of polyester filament yarn are expected to sustain low in the next 1-2 weeks, and stocks are likely to accumulate.

As for polyester plants, although current stocks of finished goods are low, the devaluation risk of stocks should be alert in the future. Stocks of finished goods in polyester plants are expected to rise with lower buying enthusiasm of downstream players, and these stocks will devaluate apparently once feedstock price slips. Thus, making a good preparation to cut production may be the best choice for polyester plants. Some PFY plants presold a lot previously, so these plants may postpone production reduction amid the delivery issue. Generally, the operating rate of twisting units, fabric manufacturing plants and polyester plants are expected to decrease for a period, but the decrement may be not big, requiring to observe the situation in the second half of Jul.

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