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Polyester yarn market shows decadence in “bullish slack season”

Views:2     Author:Site Editor     Publish Time: 2021-05-26      Origin:Site

There are rumors saying that strong market is seen in this traditional slack season-May and Jun. However, polyester yarn market hardly conceals its decadence with slowdown of transactions.

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Polyester feedstock and PSF futures nosedived alongside commodities previously, and then they kept in rangebound, dragging down spot PSF to 6,700-6,800yuan/mt. Facing downtrend, market players turned hesitant. With adequate stocks of raw materials, polyester yarn mills became calm buyers. In the meantime, with more participation of spot-futures traders, direct-spun PSF plants sold more difficultly amid downward market. The spot profit of direct-spun PSF also slid to fluctuate within 100-200yuan/mt. The plants were in a dilemma of inventory accumulation and sales promotion. In late May, Huahong and Sanfangxiang plan maintenance, and the operating rate of direct-spun PSF is predicted to decrease to around 90% at that time, which has limited impacts on the supply. In short term, direct-spun PSF will run under pressure.

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Comparatively, the price of close virgin PSF tended stable and the sales also moved smoothly. It has been in destocking since May. However, the plants will not adjust up prices despite around cost line or facing losses due to previously high inventory and bearish outlook.

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In terms of demand, the export was contained obviously due to serious pandemic outside China and high sea freight rate. According to CCFGroup, a considerable part of polyester yarn has flown to warehouses of traders instead of downstream. Bearish downstream demand and inventory accumulation of grey fabric are indisputable facts.

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The weakness of upstream raw materials and sluggish downstream demand have not been reflected in polyester yarn prices which are offered stably by the mills. T32S is mainly traded at 11,800-12,100yuan/mt in Fujian, Jiangxi, Jiangsu and Zhejiang, and at 11,200-11,400yuan/mt in Hebei. Most market players believe that the inventory accumulation is likely to happen in May and Jun due to slack season. Polyester yarn mills take orders actively at present amid great spot profit and some of them provide more discounts. As a result, trading price of polyester yarn has moved down in fact. It is predicted to keep weakly stable in short term and the transactions will keep slack.

 


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