As Supply Increases, Polyester Filament Yarn Price Continues to Decline

China: Following a minor increase over the holiday, the price of Polyester Filament Yarn (PFY) has now returned to where it has been before the Spring Festival holiday. The PFY 150D/48F declined during the week ending 24th February and hovered at USD 1184/MT Ex-Jiangsu. The main causes of the PFY market's price decline were increasing supply and decreasing feedstock costs.

Before the Spring Festival holiday, feedstock Polyester prices soared, supporting an increase in market prices after the vacation. However, following the holiday, feedstock prices quickly declined, lowering the prices of Polyester products. Purified Terephthalic Acid (PTA) and Mono-Ethylene Glycol (MEG) prices also decreased, impacting PFY prices. However, PFY price had increased after the holiday but declined this week by 1.6%. The supply pressure was the key reason why the actual trading price did not increase.

After the Spring Festival break, as workers gradually returned to their positions, the operating rate of PFY factories quickly increased, reaching a level similar to before the holiday when it was approximately 65%. Hengli's phase III unit, which has a 200 kt/year PFY capacity, has already started one line, and the left lines will follow suit. With rising supply but low demand, particularly weak export orders, PFY factories are under pressure from supply.

In terms of supply, a higher US dollar, rising borrowing costs, and capital outflows are all having an adverse impact on emerging markets and developing nations due to the high rate of inflation. Amid rising inflation in European nations, Chinese firms who experienced delays in orders asserted that the empty containers at the port were simply a result of a regular market adjustment.

According to the ChemAnalyst forecast, the price of PFY is anticipated to drop in the upcoming weeks since it is expected that the demand may remain low from downstream sectors amidst the smooth processing of units.