The PSF is Difficult to Maintain 10,000 Yuan

    Since the half of this month, polyester staple fiber market was weak, and the main quotation dropped frequently.                  

    Although a measure of cutting interest rate was introduced, the promotion function to market was limited. The polyester staple fiber market kept slack, and main quotations of manufacturers dropped continuously. At present, 1.4D direct spinning polyester staple fiber price dropped to 10,000-10,200 Yuan/Ton, which dropped 10.22% compared with the price at the beginning of May.

    But the continuous drop of PSF quotation was failed to stimulate demand, the actual demand of downstream factories was low and their operation and purchase intention were all in downturn. What troubles did PSF faced?

Firstly, the drop trend was unchanged from the aspect of cost

    First, due to the drop trend of upstream feedstock recently, the polyester staple fiber market lost effective support.    Although the news which EU finance minister agreed to offer Spanish bank system for a maximum of 100 billion Euros financial aid eased the investor’s fear to Spanish bank crisis and made oil price rebound once more than $2, the optimism mood disappeared very quickly. As investors worried about the global economic prospect, the international oil price fell to the lowest point since eight months.

    Among which the light crude oil futures price in New York Mercantile Exchange dropped to 82.7 dollar/barrel (delivery on July), it is the first time the price below 83 dollar/barrel since last October. The Brent crude oil price dropped to $98.00/barrel (delivery on July). Influenced by weaker oil price, recently PTA and the spot market are unable to rebound and consolidating. Currently, PTA spot goods price have fell to 7000 Yuan/Ton, which had slumped to the starting point of two years ago. And the PTA futures price also fell continuously, the main contract 1209 closed at 7,020 Yuan/Ton, which dropped176 Yuan/Ton compared to last trading day and the drop rate was 2.45%.

    Secondly, the cotton price declined sharply

    As we know that most polyester staple fiber is used to replace cotton for producing yarns. Therefore, the price difference between cotton is the important factor which influenced polyester staple fiber price. From the aspect of current domestic cotton market trend, cotton price dropped dramatically due to the deteriorated macro bad news and low domestic demand. By 12th, level 328 CC Index dropped to 18,421 Yuan/ton, level 229 CC Index adjusted to 19,541 Yuan/ton and level 527 CC Index declined to 16,162 Yuan/ton.

    Thirdly, the downstream demand remained low

    Of course the decline of polyester staple fiber was critically caused by the low downstream yarns demand. Since this year, the yarns market kept week continuously and the demand was low. Among which the pure polyester yarns market was also weak, the market deal was not prosperous and stock pressure increased. The market exception of price decreased and quotation of manufacturers was also cutting down. Now 32S polyester yarns market price was down to 14,200 Yuan/ton, 45S pure polyester yarns main price dropped to 16,000 Yuan/ton. Especially terminal demand gradually declined in recent stage, the phenomenon of downstream yarns factories stopping operation was more serious and the feedstock demand of factories was insufficient continuously.

    Fourthly, the price of PSF was difficult to maintain 10,000 Yuan

    Generally, the current market confidence was insufficient, which made the whole textile industry chain in pressure. PSF market was not only restricted by the continuous drop of the upstream feedstock price and slack cotton market, but also restricted the low downstream purchase and increased PSF stock. So it predicted that the drop trend of the PSF price was unlikely to change in short term and the price was difficult to hold on 10,000 Yuan/Ton.