PFY Prices Rebound in the US Market on the Back of Shipment Delays

With the beginning of the second half of November 2023, the Polyester Filament Yarn (PFY) market in the USA rebounds on the back of shipment delays. This delay comes after the impact of Panama Canal congestion, a vital shipping route that connects the Atlantic and Pacific Oceans, and it is applied by several cargos carrying goods between China and the USA.

The pricing dynamics for PFY in the USA have experienced a rollercoaster ride in recent weeks, with prices rebounding briefly in mid-November before succumbing to renewed bearish pressure. This complex market scenario is driven by a confluence of factors, including the ongoing Panama Canal congestion, the potential impacts of El Nino, and broader supply chain disruptions. The Panama Canal, a critical artery for global trade, has been grappling with congestion issues for a few weeks, leading to increased shipping costs and delays for goods passing through the canal. This congestion has subtly impacted PFY prices in the USA, as longer ship waiting times have driven up fuel and labor costs. Moreover, the congestion has resulted in delays in delivery times and potential shortages of PFY as buyers scramble to secure supplies in a constrained market to settle the quotations at 1342 USD/tonne PFY 150D/48F CFR, Texas, with a hike of 1.7% in the week ending of November 2023.

The US PFY market heavily depends on Chinese exports, and the shipment delays due to longer transit time make the cargo more expensive. As a result of the congestion, some shippers are choosing to avoid the Panama Canal and instead route their shipments around Cape Horn, which is a much longer and more exclusive route. However, this option is not always feasible, especially for large ships, including PFY materials. The Panama Canal Authority (PCA) is taking steps to address the congestion, including implementing new water conservation measures and increasing the number of daily transits. However, congestion will likely remain a challenge for the foreseeable future.

As per ChemAnalyst, the PFY prices in the US market are expected to persist in the bullish trend amid the potential for an El Nino event in the Pacific Ocean, which poses further risks to PFY prices as it could affect the supply of key raw materials used in PFY production, such as Purified Terephthalic Acid (PTA) and Monoethylene Glycol (MEG). The potential for rising raw material costs and the persistence of supply chain disruptions suggest that PFY prices may face upward pressure in the upcoming weeks.