Challenging Times for PFY Producers Due to Rising Feedstock and Declining Demand
Challenging Times for PFY Producers Due to Rising Feedstock and Declining Demand

Challenging Times for PFY Producers Due to Rising Feedstock and Declining Demand

  • 26-Apr-2023 11:20 AM
  • Journalist: Harold Finch

Polyester Filament Yarn (PFY) firms have been in a difficult situation as the impact of upstream and downstream industries has recently suppressed the market. Feedstock prices have risen while downstream demand declines amidst sufficient inventories in the region. As a result, the price for PFY appeared to be declining in the global market by approximately 1.5%. The Chinese PFY 150D/48F export price hovered at USD 1220/MT FOB Shanghai during the week ending April 21, 2023.

In the upstream market, Paraxylene price was rising due to the low inventory, intensive turnaround, and expanding demand for Gasoline blending. The feedstock Purified Terephthalic Acid (PTA) market's price remained stable after following a sharp increase, aided by a high operating rate in the Polyester market.

Meanwhile, some small-and-medium-sized Polyester companies insisted on stopping or reducing output in the downstream industries because they did not want to pay for expensive raw materials. By April 13, the operating rate of Draw Textured Yarn (DTY), a type of PFY factory and fabric mills in Zhejiang and Jiangsu, had decreased to 65%. Polyester firms were also put under selling pressure as end-use facilities refused to make purchases due to high raw material prices, and certain downstream plants even suspended or reduced operations. As a result, it is predicted that PFY sales will stay low. In the coming weeks, we should pay close attention to the May Day holiday schedule (Apr 29-May 3) of PFY factories and fabric mills, as well as the PFY discounts in late April.

ChemAnalyst forecasted that "The price of PFY is expected to decrease due to weak demand from downstream home textile sectors. Additionally, it is expected that Polyester companies may face mounting inventory in the near future, indicating an oversupply situation. However, it is worth noting that market conditions can change rapidly and unpredictably due to the volatile crude oil market, affecting the whole value chain of its feedstock market.

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