The Energy Crisis and Supply Crunch Support the Rebound of the European Polyester Staple Fibre (PSF) Market

Humburg, Germany: Despite weak demand, Polyester Staple Fibre (PSF) prices rebound marginally due to the soaring energy prices and supply crunch. The increasing energy cost directly impacts the production unit in the Asian and European countries, lowering the market's inventories. While, High inflation harms product prices, passing the load to the consumers.

As we know, the extreme weather conditions and the conflict in Ukraine have put pressure on the feedstock market, which has resulted in a sharp increase in energy prices in Europe. At the same time, heat waves also impact goods supply to the European nations due to the drying of the continent's main shipping lanes. The drying up of the river Rhine is hindering the flow of cargoes, affecting the availability of products in the domestic market.

Regarding production, some downstream spinning mills' operating rates have been reduced in China due to the rising temperature. China has implemented a Power Curtailment Policy. Under the power curtailment policy, some downstream factories operated only for three days while they remained closed for four days to reduce the power demand and electricity usage.

In addition, demand for apparel remains low during the week ending 2nd September. Since extreme weather conditions have impacted cotton production, cotton prices have compelled textile manufacturers to blend Polyester with cotton in the apparel industry. As a result, Polyester demand has increased as a substitute due to the high blending of Polyester with cotton yarn.

According to the ChemAnalyst Prediction, "The demand for Polyester Staple Fibre (PSF) may gradually increase with approaching festive season, and the supply pressure may also get minimized after the start of Xinfengming's new production unit. Thus, we should pay attention to the changing raw material cost and demand outlook."