Eurozone Polyester Filament Yarn Market Degrades Due to Excessive Inventories Amidst Slow Offtakes

Europe: Prices for Polyester Filament Yarn (PFY) have been decreasing in the week ending 24^th February 2023 as a result of subpar sentiments from downstream sectors. Since feedstock Purified Terephthalic Acid (PTA) and Mono-Ethylene Glycol (MEG) costs drifted and tepid demand resulted in a stockpile over the week, the smooth production served to maintain the price of PFY further. As a result, the PFY 150D/48F market had a 1% drop, with prices settling at USD 1316/MT CFR Hamburg.

Imports from Europe and the United States have been declining since the start of this year. The biggest reason is the high inventory in overseas markets due to the slow destocking cycle. However, the expert believes that the exports are difficult to improve in H1 2023, and the performance in H2 2023 might depend on the destocking situation of the overseas market.

In the Eurozone, the factory output index increased from 48.9 to 50.4, signaling the first increase in production since last May 2022, as manufacturers managed a slight increase in output. Manufacturers began to have more faith in the German market, as the energy supply was still reliable and steady. Supply-chain tensions dramatically diminished in February 2023, and average input prices for producers of PFY fell.

In the Chinese market, Although the operational rate of end-use plants like knitting & weaving for making polyester fabrics such as home furnishings materials, PFY sales scarcely increased because downstream plants mostly consumed from stocks. Downstream plants had enough feedstock on hand to maintain output for at least three to five days and up to a month for certain units.

In the interim, higher end-use plant running rates would increase stock consumption, and rising orders might boost PFY sales. The facilities currently have a consistent supply of product stock, and producers might raise their prices. As a result, the price of PFY is expected to increase consistently as feedstock costs stabilize and grow.

As per the anticipation of ChemAnalyst, “The worst time for polyester feedstock is gone, and end-use demand is gradually increasing. Thus, PFY price may rise if feedstock costs and demand are favorable”.