June 2024: Global PSF Prices Fluctuate Amidst Logistics Disruptions and Weak Demand

In Germany, the prices of Polyester Staple Fibre (PSF) showed a balanced trend in the early weeks of June, later in the next week the prices moved upward with a minimal change of around 0.6%. During this period, PSF feedstock MEG remained favorable, while PTA prices surged by approximately 0.8% in the early week. This upward trend in PTA occurred despite sluggish demand from major downstream industries. Disruptions in supply routes and shipping delays due to the Red Sea crisis and port congestion were the main factors driving the price surge. Despite these logistical challenges, the supply of PSF remained moderate, although demand continued to be lackluster.

Following the same trend, PSF prices in the US market remained unchanged in the early week of June but started to rise afterward. This strengthening was primarily driven by increased Asian imports, mainly from the Chinese market. Despite this, the prices of PSF feedstocks MEG and PTA remained favorable amid a soft crude oil market. According to the EIA's weekly report, U.S. commercial crude oil inventories rose during the early week by 1.2 million barrels from the previous week. U.S. crude oil prices ended May 2024 with their worst monthly performance of the year. U.S. oil prices fell by 6% in May, marking the worst performance since November, while the global benchmark Brent dropped 7.1%.

PSF prices in the Asian market remained balanced in the early week of June amid globally subdued demand, though there was a minimal positive change in the second week primarily due to logistical disruptions. Again, on June 21st, prices stayed steady at the high prices. However, the supply of PSF was tight, prompting traders to adjust prices upwards. The increased cost of PTA provided strong support for PSF, with factories maintaining a firm stance on price appreciation, causing prices to rise. The international crude oil market showed volatility, but cost support for PTA persisted.

As the China lead globally for the PSF manufacturing and export, this period has been a challenging for the overall Asian-Europe and Asian-US trade, impacting the overall textile market. In the Chinese PSF industry, many companies rely on foreign trade firms as intermediaries for exports. Recently, profit margins for these trade companies have shrunk, with some margins dropping to around 10%. According to the data, as of June 10, sea freight container prices from East Asia to the West and East Coasts of the United States increased by 17% and 12% from the previous week. Freight rates on European and American routes have risen sharply, with daily price changes observed. On some routes, freight rates have surged by over 50%.

In conclusion, analysts anticipate that PSF prices may fluctuate within a narrow range due to the cost support from rising freight prices, which could compel the Asian market to increase overall export costs.