PFY: It was Difficult to Improve in Mar.

      The rainy weather has lasted for half a month in China-Jiangsu & Zhejiang region since Mar. Just like the continuous rain, the price of polyester yarn was chilling in the air in early spring. For example, the leading manufacturer quoted the polyester semi-bright FDY50D/24F at 14,600 Yuan/ton by 6-month acceptance, bright FDY50D/36F at 16,200 Yuan/ton by cash and DTY150D/48F at 13,300 Yuan/ton by acceptance. The quotations all dropped 400 Yuan/ton compared with the prices in early Mar. And the cash quotation of POY150D/144F was 12,100 Yuan/ton, which fell 500 Yuan/ton compared with it at the beginning of this month. Whereas, some manufacturers offered much discount during the close of deals, so the actual transaction prices fell further than the quotations.

      Therefore, what factors resulted in the downward tendency of the polyester yarn market? The analyses are as follows:

      At present, although the PX price was still in the high side, it couldn't provide a powerful backup for PTA. On the contrary, the shipment intention was strong in the market and the PX price showed downward tendency affected by the depressed demands of PTA. Contrasted the highest price 1,658 dollars/ton (FOB Korea) created on Mar. 5th, PX Asian Price was continued to weaken, which dropped 73 dollars/ton to 1,585 dollars/ton (FOB Korea), down 4.4% by 16th of this month.

      Due to the weak backup of PX market, the PTA spot market also went lower. Ended by Mar.16th, the leading negotiation price of PTA in domestic market dropped 400 Yuan/ton to 8,700 Yuan/ton compared with the high record in early Mar; PTA price in overseas market continued to decline. The leading negotiation price of Taiwan goods slumped to 1,165 dollars/ton, fell 45 dollars/ton compared with the beginning of this month. Meanwhile, MEG price also declined sharply. Currently, the leading negotiation price was estimated around 980-990 dollars/ton in overseas market and 7,300 Yuan/ton in domestic market, declined 90 dollars/ton and 900 Yuan/ton separately. In addition, the price of the semi-dull polyester chips in China-Jiangsu & Zhejiang market decreased to 10,400 Yuan/ton (by cash) compared with the price 10,850 Yuan/ton (by cash) in early Mar.

      Since Feb. the demands had been depressed in downstream fabric market. Weaving factories reduced the operating rates one after another from Mar. and individual small businesses even stopped production. The main reason is that the inventory pressure of weaving factories broadened before Spring Festival, but the traditional peak season did not come after the holiday, which made the inventory pressure dramatically increased. At present, the inventory of grey cloth was more than 1 month, closed to 2 months for most of the manufacturers. Judged from the newest Commerce Department-Shengze Silk & Chemical Fiber Index, "50 indexes” continued downward trends in Feb. The average purchase amount of raw material, especially, slumped 1383.1072 points enormously, down 64.27% compared with the previous month. Since Feb. the price index of chemical fiber products was in weak consolidation. So it’s not hard to see the price of weaving factories was still weak and the buying intention of raw material fell sharply.

      Besides, Chinese Customs Bureau announced the import and export data of foreign trades in Jan-Feb recently. According to it, the total import and export value was 533.03 billion dollars, increased 7.3% year-on-year. Hereinto, the exports was 264.39 billion dollars against the imports of 268.64 billion dollars, up 6.9% and 7.7% separately. Trade deficit was 4.25 billion dollars accumulatively. In export commodities, the exports of apparel in China was about 19.29 billion dollars, decreased 2.5%; exports of textile products was 11.94 billion dollars, dropped 2.6%; exports of shoes was 5.95 billion dollars, down 2.1%; exports of cases and bags was 2.53 billion dollars, fell 12.1%. We can see that the export demands were insufficient apparently, but China’s textile industry was pulled by foreign trade, so it seems that the peak season of fabric market will postpone in the near future.

      Although the voice of underproduction to support value was heard in polyester raw material market, parts of manufacturers stopped for equipment maintenance, the main determinants of the trend in polyester yarn market was downstream demand. Recently, the slowdown in overall economic at home and abroad already became consensus, the promotion of foreign trade and domestic demand had less space. In conclusion, it is predicted that the price of PFY was difficult to improve in short term.

      (China-Shengze"50 indexes" reflects not only the overall condition of textile industry in time series but also the prosperity index of Enterprises in a sense. It depends on net cash flow of 50 Silk & Chemical weaving enterprises that have the largest or larger production scale and it is statistical released monthly. "Shengze 50 indexes" reflects the fluctuation of management efficiency in leading enterprises in Shengze and it also reflects the change of enterprise competitiveness to some extent.)