CHINA: PSF Prices May Drop Below 10000 Yuan/ton

Since dropping on Oct 20, the 1.4D*38MM direct melt-spun PSF prices dropped all the way from 12500 Yuan/ton (US$ 1510) to 10300 (US$ 1245) Yuan/ton on Nov 10, and then PET staple markets improved somewhat. In mid Nov, the prices were stable at 10300-10500 Yuan/ton, but since last week, the quotations frustrated sharply, most of the PET staple enterprises lowered the ex-works prices from 10300-10500 Yuan/ton to 10100-10200 Yuan/ton, part of them even quoted the prices only 10000 Yuan/ton (US$ 1210).

The chips-spun staple prices have been lower than 10000 Yuan/ton, in south Jiangsu the common self-lifting quoted prices were only 9800Yuan/ton, the low priced goods poured into the markets again in great quantity. The PSF prices approached 10000 Yuan/ton again early this week.

It is close to the end of year, most of the PSF manufacturers paid attention to the ratio of production-sales. In order to keep the balance of production to sales, they lowered the prices to stimulate the sales, e.g. Tianjin Petrochemical Co decreased the prices from 10500 Yuan/ton to 10200 Yuan/ton this week; the Longdi Group lowered the prices from 10400 Yuan/ton last week to 10200 Yuan/ton; Shandong Jinan Chem.

Fiber Co and Zibo Wanjie Co quoted the prices 10200 and 10100 Yuan/ton each this week, and Liaoyang Petchochem. Co had the direct-sale prices of 10000 Yuan/ton (storehouse lifting prices) in East China and the ex-works prices were only 9800Yuan/ton in the North and Northeastern China. Every plant was hindered clearly in sales pressed and hit by the low price goods.

In Fujian markets, 1.4D*38MM direst spun PSF common transaction prices dropped to 10000-10100 Yuan/ton, the imported goods even quoted at 9800-9900 Yuan/ton; in south Jiangsu, the chips-spun staple prices dropped below 10000 Yuan/ton at last weekend, on Tuesday it was near 9800 Yuan/ton. To the hard anticipating markets, most of the traders took the wait-and-see attitude outsid the markets.

The downstream pure PET supn yarn transaction was slack though without much dropping. Most of customers were at the edge of loss, with stock increasing, they undersold the PET spun yarns. So far the 50s pure PET yarn common transaction prices were 15000-15200 Yuan/ton in Qianging market, part of low quality goods dropped to 14800 Yuan/ton in prices.

And the downstream demand shrank continuously, it could not pick up clearly even if the prices lowered. In Jiangyin, Cixi and Zhuji, the shirt cloth production was already near the end, the plants' demand and acceptable price level to the PET yarn fell back further, with more wait-and-see emotion.

Seeing from the present conditions, the PET chips transaction prices are commonly 8400 Yuan/ton, if only the PET staple keeps over 9500 Yuan/ton, a certain profit extent could be ensured. So far in order to fulfil the indexes and keep the balance of ratio of production-sales, the enterprises lowered the prices as soon as there was stock, which would cause big pressure to the PET staple later tendency.

So far the critical problem to PET staple has been lacking the support from transaction volume, the deals are only limited between PET staple enterprises and spun yarn mills, the middlemen and dealers have almost withdrawn from the markets entirely.

And in Nov and Dec some new production lines will soon come onstream, the new plants' low priced products will certainly influence the PET staple tendency, and the PET chips are feeble to go up to form the effective support to PET staple.

Seeing to summarize every factor, recently the PET staple quotations are possible to drop below 10000 Yuan/ton.

November 20, 2003

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Added: November 20, 2003
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