Over the past one month, direct spun PSF and polyester yarn experienced intense fluctuations in China.

The fluctuation of direct-spun PSF is mainly attributed to costs. Prices of direct-spun PSF plants are hit heavily by the participation of spot-futures traders in trades in addition to excessive supply against demand and occupation of re-PSF. Direct-spun PSF plants have to adjust down prices along with costs.Polyester yarn is more resistant to the decline. Most polyester yarn mills hold pre-sale orders which could last to early November. However, the demand is bearish now.There is no large difference for the spinners to offer 13,500yuan/mt or 13,800yuan/mt, so they do not lower prices so actively. Then the product inventory of polyester yarn increases quickly.

Some believed direct-spun PSF would rebound later amid tight supply and high price of crude oil. Nevertheless, PTA plants now run at over 80 per cent and the processing spread is high within 700 to 800yuan/mt, so it has downward room. Direct-spun PSF will be hard to change the current weakness and polyester yarn will continue to retreat. Later, downstream weavers will focus on consuming stocks and polyester yarn will step into weakening territory, both price and trading volume.