The polyester staple fiber (PSF) industry is at a delicate balance: upstream raw materials are supported by low inventories, yet downstream demand remains weak, squeezing processing margins into losses. On August 15, major producers coordinated production cuts to offset sluggish demand, but whether this self-rescue can truly support the 'Golden September' market depends on actual order recovery.
Raw Material Divergence and Cost Support
In July, PSF prices surged on Middle East tensions, with East China spot prices hitting 7,675 yuan/ton. Entering August, geopolitical risk premiums faded, but raw materials showed divergent strength: PTA basis approached 300 yuan/ton due to delayed restarts of two major units and rain-disrupted port operations, with social inventories potentially falling to a 44-month low. MEG also strengthened, with East China port stocks at a 15-year low and spot premiums up to 540 yuan/ton amid shipping disruptions and maintenance. Low inventories provide solid cost support, but upcoming restarts may weaken this support.
Supply-Demand Mismatch and Industry Losses
On the supply side, July operating rates hit 70.36%, with ample spot supply and new capacity planned for H2. On the demand side, terminal textile orders saw limited growth, yarn mills held high finished goods inventories, and procurement remained just-in-time. At Keqiao Light Textile City, August grey fabric transactions contracted, weaving runs stayed low, and merchants bought on an as-needed basis, limiting price pass-through. Rising costs, ample supply, and weak demand squeezed processing margins, widening losses and spreading pessimism.
Coordinated Production Cuts and Short-Term Support
On August 15, major PSF producers launched an industry self-rescue plan, including delaying new capacity and restarting idle units, increasing output cuts, and abandoning price wars. Leading enterprises in Jiangsu, Zhejiang, and Fujian all participated, covering mainstream direct-spun capacity. If implemented, operating rates could drop from 70.36% to around 67%, reducing monthly supply by about 30,000 tons. For Keqiao and Xiaoshao weaving clusters, tighter raw materials will raise trading costs and limit fabric price cuts, but without order improvement, fabric price hikes face resistance.
Medium- and Long-Term Uncertainties
The effectiveness of production cuts is uncertain. First, execution may be flexible; some enterprises could resume load after price rebounds. Second, new capacity is only delayed, not canceled, and will pressure supply once profits return. Third, demand is the core constraint; without September order improvements, supply cuts alone cannot sustain price gains. Keqiao's trading activity is a key window to watch, including new and repeat orders and whether weaving mills shift from just-in-time to proactive stocking.
Price Rhythm Forecast
From late August to early September, production cuts will stabilize and strengthen the market, with processing margins gradually recovering. In mid-to-late September, prices will oscillate between weakening costs and demand recovery. The biggest risk is supply rebound after profit repair, likely leading to repeated volatility rather than a one-way rally.