Polyester Filament Yarn (PFY) prices followed divergent trends in February in major markets, with China recording relative calmness followed by a late-month slump, and Germany recording an initial surge before prices decline by the end of month. Global supply condition remains stable driven by consistent feedstock cost. However, Demand-side, caused PFY price divergence with China experiencing weak textile industry activity and Germany initially reacting to increased feedstock prices before falling in line with the rest of the Asian market decline.

In China, PFY prices remained stable throughout most of February before declining towards the end of the month. Supply remained abundant as PTA prices held steady and operating rates in PTA-related industries stayed elevated, ensuring consistent output. However, demand from the downstream polyester sector did not rebound as expected despite increased operational loads. The seasonal downturn in the textile industry further limited PFY uptake, which resulted in an accumulation of stockpiles of polyester products.

Additionally, imposition of 10% tariff hike on Chinese textile exports by the United States impacted foreign trade orders, particularly in medium-to-lower-end segments, resulting in order cancellations and reduced profitability. Moreover, poor domestic sales of winter and autumn clothing last year left a legacy of excessive stocks, compounding the bear pressure on PFY prices as the month concluded.

Whereas Germany's PFY market first registered a price hike in February, bolstered by higher feedstock prices and resuming trading. As Chinese manufacturers restarted production and shipments to Europe accelerated, supply continued to be adequate. Nonetheless, high PTA prices and escalated gas prices supported rising domestic production costs, maintaining initial price advances. The textile industry witnessed modest demand, driven mainly by inventory restocking activity.

However, as the month progressed, PFY prices in Germany fell, keeping pace with the decline in the exporting Asian market. Steady PTA prices and high operating capacities in China curbed production expenses, causing German export prices to fall. Decline ocean freight rates from Asia to Northern Europe further lightened import costs. Concurrently, Germany's textiles industry reported softened procurement momentum owing to high inventories due to stockpiling in previous weeks, weakening retail demand, and rising inflation, which restrained new PFY orders.

In the future, pressure on PFY prices in both China and Germany can be expected, unless demand bounces back. In China, the legacy of high apparel inventories and poor international competitiveness might cap any possible immediate recovery. In the case of Germany, persistent inflation, and a squeezed ability to spend for customers may hold back the textile industry, leaving demand muted. Nevertheless, any volatility in feedstock costs or supply chain issues, including possible energy price volatility in Europe or policy change impacting Chinese exports, may add new pricing uncertainty for PFY in the months ahead.