Price of PFY hiked greatly from end-May to early-Jul mainly driven by feedstock market

This round of hot sales seemed to have some similarities with that in end-May: slanting low price, low feedstock inventory in downstream plants, and better anticipation toward demand. Will price of PFY rebound substantially like end-May?

Price of PFY hiked greatly from end-May to early-Jul mainly driven by feedstock market, particularly PTA. Price of PTA increased to above 6,800yuan/mt from 5,400yuan/mt, and the PTA-PX spread was as high as around 2,400yuan/mt, which is supposed to be constrained in the future in expectation of the startup of new PTA units.

Currently, stocks of grey fabric were slanting high, and grey fabric plants were keen sellers, but the operating rate of downstream plants may be hard to rise when new orders remained scarce and sales failed to improve, which will further impact their purchasing continuity and weigh on PFY price. Cash flow of POY and FDY was during positive territory now, especially POY. Taking 150D as an example, cash flow of POY was around 500yuan/mt, and profit of FDY was around 100-200yuan/mt. DTY plants were basically around cost line, indicating poor operation of PFY end-users.

Above all, hot sales of PFY are supposed to push up PFY price, but the rebounding range is expected to be smaller than that in end-May unless downstream demand will boom in later period.