Global Polyester Staple Fiber Prices Decline in Late July 2024 Amid Eased Freight Logistics

During the last week of July 2024, the global prices of Polyester Staple Fiber (PSF) saw a decline, following a previously stable trend. In the US market, Polyester Staple Fiber (PSF) prices fell by approximately 1.7% during the final week of July 2024. A similar trend was observed in Europe, where PSF prices in Germany also experienced a significant decline, largely due to the import of lower-priced PSF from the Asian market. Additionally, domestic production of PSF remained favorable, with both critical feedstocks for PSF showing a balanced price trend. Furthermore, the reduction in marine logistics freight charges also contributed to the decrease in PSF prices.

The Shanghai Export Container Freight Index has fallen for two consecutive weeks, with all ocean routes in Europe and the United States experiencing declines, especially the West Coast route in the United States, which saw a significant drop. It is expected that freight rates will continue to fall further, though the decline may narrow. Freight charges declined significantly during the penultimate week of the month.

In the Asian market, particularly in China, the freight rate from Shanghai to Europe stands at 5,000 USD per TEU (Twenty-foot Equivalent Unit), showing a week-on-week decline of 51 USD, or 1.01%. For shipments from Shanghai to the West Coast of the US, the freight rate is 7,124 USD per FEU (Forty-foot Equivalent Unit), experiencing a significant decrease of 530 USD, or 6.92% week-on-week. Meanwhile, the freight rate from Shanghai to the East Coast of the US is 9,751 USD per FEU, down by 130 USD, or 1.32% week-on-week.

In the Asian market, particularly in China, the domestic PSF market continued to weaken in the last week of July, with prices declining by around 1% in FOB prices. The ongoing reduction in costs has weakened support for PSF, leading to a significant price drop at mainstream production factories. This decline in prices has increased the willingness of downstream buyers to purchase at lower rates, slightly improving the trading atmosphere. The price of raw material PTA also fluctuated downward, a decrease of 2.5% in the last week compared to the first half of the month

Recently, several PTA plants, including Yisheng Dalian's two units with a total capacity of 6 million tons, have been restarted, raising expectations of ample supply. Currently, the domestic industry's operating load stands at around 86%. In the short term, limited planned maintenance for PTA plants suggests sufficient supply, with expectations that PTA prices will continue to be weak. Mainstream PSF manufacturers plan to reduce production by 10% in the coming week, which may tighten supply and support market sentiment. However, downstream yarn mills are skeptical about the production cuts and remain in a wait-and-see mode. Under pressure from accumulated inventory, they are cautious about purchasing raw materials.

Conclusively, PSF prices are likely to remain weak in both regions in the coming weeks, coupled with low downstream demand, favorable feedstock prices, and eased marine logistics.