Views: 6 Author: Site Editor Publish Time: 2019-05-13 Origin: Site
Direct-spun PSF plants mostly ran at high rate as they experienced tight supply during Spring Festival holiday. As scheduled, the operating rate climbed up to nearly 90% and kept stable then. The sales of direct-spun PSF were negatively affected by soft end-user demand in Mar and slump of polyester feedstock in Apr. The sales in Mar were mainly owing to the demand advanced by tax rate adjustment. In fact, the demand did not improve. Later on, the demand contradiction appeared and sales ratio weighed increasingly on direct-spun PSF plants.
From the chart below it can be seen that the inventory of direct-spun PSF plants moved all the way up. It does not include that has not been consumed by downstream traders yet. The pressure from sales ration exploded intensively on the whole in Apr. Some direct-spun PSF plants even did not see the sales ratio more than 40% for two weeks. By now, average inventory of direct-spun PSF was nearly 12 days.
In Apr, the market players’ mindset changed from stable to bearish. Direct-spun PSF price was seriously burdened with quick fall of polyester feedstock and sluggish end-user demand. With additional escalated China-US trade war, the market sentiment was dull, which is unfavorable to the sustainable development later. In end-Apr, direct-spun PSF plants lowered offers, but it was not effective for sales promotion. As a result, downstream spinners turned cautious to restock. Many of them operated with low feedstock inventory amid bearish anticipation.
Polyester feedstock may sustain the weakness later. And the bearish expectation to PX started to show its influence. In addition, processing cost of PTA reached nearly 2000yuan/mt. As a consequence, more concerns about the decline showed up on the market.
With profit compressed continuously, some large-sized PSF plants revised down the expectation to later market. An on the other hand, there was no discount in PTA trades at present. Thus some direct-spun PSF plants were forced to reduce production by the overall decline of the market, starting from those in Jiangsu. Some PFY plants also implemented their plans of production. Based on the experience last year, the operation amid low profit turned more flexible. As things stand, the maintenance of direct-spun PSF plants is just a start. The operating rate of direct-spun PSF plants has reduced to 80% and some will lower production further later. Sinopec Shanghai plans to start maintenance from May 20.
Currently direct-spun PSF plants reduce production increasingly and rapidly, similar to that in last Aug. On the other hand, it is favorable to support cost and reshape market confidence. The more flexible operation of polyester plants also reflects the improvement of market development. As a whole, direct-spun PSF price is expected to gain some support later.