The whole polyester fiber value chain has turned to be profitable in China. It has turned optimistic from being pessimistic.

In early December, the spread of the pandemic damped demand. With high inventory, polyester fiber plants and downstream factories continued cutting or suspending production to consume inventory before the spring festival holiday. The operating rate of fabric mills, DTY plants and direct-spun PFY companies slipped. The pandemic prevention and control policy eased in December and the operating rate of downstream plants rapidly recovered. Speculative procurement rapidly improved. As a result, the inventory of many sectors continued reducing. The profit of polyester fiber was also restored.

The operating rate of DTY plants, fabric mills and printing and dyeing plants increased. The operating rate of polyester yarn plants increased to around 60 per cent from 54 per cent. The inventory of PSF in polyester yarn plants also increased to nearly 15 days from around one week.Sales improved and inventory fell. The cash flow of PFY and PSF companies also improved.

If downstream speculation increases further, inventory of PFY and PSF may reduce further and the cash flow of most varieties may improve. Some companies may show a higher intention to ramp up the run rate.