Qiao Yu, Senior Analyst of CCFGroup, delivers her report of Virgin PSF and recycled PSF operation differences amid supply pressure and demand recovery.

The report is divided into three parts:

1. Polyester expansion process

Ms. Qiao pointed out that the polyester capacity expansion will concentrated in 2023-2024, and the production capacity will exceed 80 million tons. The new polyester facilities in 2023 will mainly focus on filament, while bottle chip will gain momentum in the second half of the year, and staple fibers will be concentrated in the fourth quarter. The direct-spun PSF has a higher concentration and is a mature oligopoly market.

2. Operation and characteristics of virgin and recycled fibers

In this section, Ms. Qiao analyzes the operation of virgin and recycled fibers and concludes that this year's price fluctuations have decreased, and there is a certain level of price insensitivity in the recycled fiber market. The cost of virgin fibers is decreasing and is sometimes similar to that of recycled fibers, resulting in better profits for virgin fibers. Both virgin and recycled fibers are expanding their capacities, but the proportion of virgin staple fibers is still increasing. The export of staple fibers has reached a new high compared to the previous year, and the export of virgin fibers is better than that of recycled fibers.

3. Outlook and summary

Based on the analysis of both domestic and international sales in the home textile industry, Ms. Qiao points out that the demand this year is lower than expected, and the industry is experiencing a weak recovery pace. However, there is a slight improvement in demand in the second half of the year during the peak season. Ms. Qiao believes that the capacity expansion of virgin staple fibers will slow down, and companies need to improve product quality and value-added services to secure their profits through various trading models. The recycled fiber market will continue to undergo reshuffling during large-scale expansions, and the increased application of diversified raw materials will lead to more polarization by 2025.