On August 25, spot prices of polyester staple fiber (PSF) in Jiangsu rose by 190 yuan/ton, with mainstream trading range reaching 8000-8100 yuan/ton and low-end at 7850-7900 yuan/ton. This is part of a recent continuous uptrend, but the real focus is not the single-day increase but the structural contradiction of simultaneous 'loss-making production cuts' and 'firm raw materials'—the PSF industry is entering a period of dual pressure from costs and supply.
Event Background
The direct trigger for this price adjustment is tightening feedstock supply. Upstream PTA and MEG have recently shown a pattern of tight supply and firm prices, significantly strengthening cost support. For PSF plants, raw material procurement costs continue to rise, while product price increases cannot fully cover cost increments, leading to expanding cash flow losses. According to public industry data, PSF processing margins have compressed to multi-year lows, with some units operating below breakeven.
To alleviate loss pressure, multiple PSF plants in Jiangsu and surrounding areas have continued production cut strategies and simultaneously reduced contract supply volumes. Production cuts and contract reductions are not short-term emergency measures but passive choices under deep losses—companies prefer to sacrifice operating rates to preserve cash flow. This supply-side contraction directly tightens spot circulation, becoming the second driver of price increases.
From a price structure perspective, after this adjustment, mainstream spot prices are 8000-8100 yuan/ton, low-end 7850-7900 yuan/ton, with a spread of 150-250 yuan/ton, reflecting differences in costs and inventories among manufacturers. Low-end supplies are mostly from earlier low-cost inventories or non-mainstream brands, while high-end supplies correspond to companies with better cost control. The narrowing spread indicates that cost-push is erasing individual differences.
Industry Impact
The PSF price increase directly pressures downstream yarn and nonwoven producers. Yarn mills may shift purchasing from 'just-in-time' to 'advance volume locking' to avoid further increases. However, if end-demand does not recover simultaneously, cost transmission will be hindered, and yarn mill profit margins may be further compressed, suppressing purchasing enthusiasm and forming negative feedback.
For PSF plants, price increases can partially repair profits, but if raw material prices continue to strengthen, loss-making status may not be fundamentally reversed. The sustainability of production cuts depends on the race between costs and selling prices—if costs fall, cuts may ease; if costs remain firm, cuts will persist and possibly expand, further supporting prices.
Foreign trade enterprises need to be alert to price fluctuation risks in quoting. In the short term, PSF prices are likely to remain firm but upside is limited by downstream acceptance. It is recommended that foreign trade enterprises adopt short-term price locking or floating quotation mechanisms when taking orders to avoid profit erosion from raw material volatility. Also, monitor RMB exchange rate changes as they directly affect export competitiveness.