China’s PFY prices to remain largely stable to end-May

10 May 2012 11:27  [Source: ICIS news]

SINGAPORE (ICIS) --China’s polyester filament yarn (PFY) prices have been fluctuating in a narrow range from the start of April to early May and the trend may continue in the second half of May because of high inventories and weak demand, industry sources said on Thursday.

The prices of partially oriented yarn (POY) 150D/48F were at yuan (CNY) 11,150-11,250/tonne ($1,767-1,783/tonne) on 10 May, according to Chemease, an ICIS service in China.  

The inventories of PFY factories are at 13-26 days’ worth, according to Chemease data. This is higher than the 15 days’ worth that most producers deem as a safe level.

PFY prices are not likely to increase because of the high inventories, despite demand from downstream factories picking up slightly in late May for restocking activity, which typically occurs at the end of each month, an industry source said.

The supply from PFY factories remains stable in May as the operating rates of PFY factories are being maintained at 76% to meet demand from downstream factories, according to Chemease data.

There are no signs that demand from textile factories will increase in May, according to industry sources.

The average operating rate of downstream textile factories is at about 70% currently, according to Chemease data, and there are no plans to increase production, said downstream producers.

At the 111th Canton Trade Fair, which was held on 15 April-5 May in Guangzhou, the total amount of transacted business was $36bn (€28bn), down by $1.05bn from $37.9bn at the previous fair on 15 October-4 November 2011. This is the first decrease since 2009, according to the website, indicating that demand for Chinese products in general from abroad has weakened.

($1 = €0.77)
($1 = CNY6.31)

By: Sunny Chen

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