Operating rate of DTY plants and fabric mills inched down in recent two weeks. According to the data from CCFGroup, the run rate of DTY plants decreased by 2 percentage points on the week to 77% by Jul 21 and that of fabric mills also descended by 2 percentage points on the week to 69% by Jul 20. The reduction was not big for the time being, but it still incarnated bigger pressure on downstream market.

Firstly, downstream plants encounter increasing cost pressure. Price of PFY rose by 400-500yuan/mt recently but downstream fabric price lacked upward momentum, mainly remaining stable. Some companies even undersold with pressure from inventory and capital. After earlier low-priced feedstock purchased in early-Jul being used up, the cost pressure will start appearing. Taking the super-soft spandex fabric as an example, it was sold under low price, but the losses were near 600-700yuan/mt or higher based on spot raw material price.