China polyester staple fibre producers cut production on weak demand

09 November 2011 07:52  [Source: ICIS news]

SINGAPORE (ICIS)--Most of China’s polyester staple fibre (PSF) producers have decreased the operating rates at their units because of softer downstream demand and increasing inventory, industry sources said on Wednesday.

The downstream demand is weak in line with the poor domestic and regional markets that have resulted in fewer exports of textiles from the country. 

Major PSF producers lowered the operating rates at their plants to 70% capacity in early November compared with 80% in September, according to data from Chemease, an ICIS service in China.

Some PSF producers have shut their plants to decrease their inventory levels because of weak demand from the downstream textile factories, an industry source said.

Huahong Group shut its 250,000 tonne/year PSF line at Jiangyin in Jiangsu on 31 October, a company source said.

Jiangsu Sanfangxiang is planning to shut one of its four PSF lines at the same site, which has a capacity of 200,000 tonnes/year, in late November, according to a company source.

However, neither company has confirmed when they will restart their plants, the company sources said.

“The market [has worsened] and we [are making] a loss, so we have to decrease our operating [rates] to reduce our losses,” a source from Jiangsu Sanfangxiang said.

Jiangsu Sanfangxiang is the biggest private polyester producer in China with a total production capacity of 2.2m tonnes/year and makes products including PSF, polyethylene terephthalate (PET) chips and bottle chips.

The producer is running its polyester units, which have a total capacity of 2.2m tonnes/year, at around 63% capacity, according to the company source.

Meanwhile, most PSF units are holding inventory of more than 17 days’ worth, with some holding stock of close to a month’s worth.

If market conditions worsen, some producers will further lower the operating rates or shut their lines, the company sources said.

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By: Sunny Chen

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