China’s PSF output to stay low during Lunar New Year holiday

16 January 2012 04:00  [Source: ICIS news]

SINGAPORE (ICIS)--China’s polyester staple fibre (PSF) producers are likely to continue running their plants at about 66% of capacity during the Lunar New Year holiday on 22-28 January because of weak downstream demand, industry sources said on Monday.

Some producers have shut down their PSF lines or are planning turnarounds during the holiday.

Jiangyin Nijiaxiang Textile shut its 120,000 tonne/year PSF line at Jiangyin in Jiangsu province for one month of maintenance at the end of December 2011. “We haven’t decided whether we will have 100% operating rates after maintenance, it will depend on the market demand,” said a company source.

Sichuan Huvis shut its 180,000 tonne/year PSF line at Zigong in Sichuan province on 4 January for 15 days of maintenance, a company source said.

Huahong Group plans to shut it 250,000 tonne/year PSF line at Jiangyin 20 January for 15 days of maintenance, a company source said.

Most PSF producers have not decided if they will increase their operating rates after the Lunar New Year holiday, although some producers said they would do so if demand improves.

Downstream textile manufacturers have placed smaller orders for the next several months because of weak domestic and overseas demand in 2011.

In the second half of last year, $26bn worth of textiles were exported in July, $25.5bn in August, $23.0bn in September, $19.7bn in October, $20.4bn in November and $22.7bn in December, according to China Customs.

The prices of PSF in east China were at yuan (CNY) 10,600-10,700/tonne ($1,680-1,696/tonne) EXW (ex-works) at the end of November 2011 compared with CNY13,950-14,050/tonne EXW in the middle of September, according to Chemease, an ICIS service in China.

The average EXW price in September and November was at CNY13,745/tonne and CNY11,046/tonne, respectively.

Prices rebounded to CNY12,000-12,100/tonne EXW on 16 January 2012 as a result of PSF producers reducing their operating rates causing supply to tighten while downstream textile manufacturers sought the material in order to stock up for the Lunar New Year holiday.

It is not clear yet if the downstream manufacturers will purchase more after the holiday, market players said.

($1 = CNY6.31)

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By: Sunny Chen

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