China PFY prices to continue decline in March on high inventory

29 February 2012 10:25  [Source: ICIS news]

SINGAPORE (ICIS)--China’s polyester filament yarn (PFY) prices are likely to continue to fall in March because of high PFY inventory and weak downstream demand, even though March is the peak season for textile manufacture, industry sources said on Wednesday.

PFY prices have been falling since early February with the price of partially oriented yarn (POY) 150D/48F dropping from yuan (CNY) 12,200-12,400/tonne ($1,937-1,968/tonne) at the start of the month to CNY11, 800-11, 900/tonne on 29 February.

Weaker demand and lower export orders have hit textile sales. Textile exports were down 0.5% year- on year at $25.2bn in January, according to China Customs.

PFY producers said they will cut high inventory levels in March. Prices will be under downward pressure but the decrease may not be significant because of high purified terephthalic acid (PTA) and monoethylene glycol (MEG) feedstock prices.

Most direct-spinning PFY factories, however, are expected to keep operating rates above 90% and to build inventory from a currently low level.

Yet even though March is traditionally a peak season for clothing manufacture, high PFY inventories are expected to cap further PFY production.

PFY producers indicated that some would lower polyester operating rates or close drawn texture yarn (DTY) plants if the market continued to be soft.

($1 = CNY6.3)

By: Sunny Chen

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