China’s polyester yarn makers are earning healthy profits. The cash flow of CVC-type polyester/cotton yarn has moved up to five-year high and TC-type one and pure polyester yarn also see years’ high.
There are two factors behind the improvement of polyester yarn cash flow.
The improvement of demand
The sound demand for cotton yarn spurs that of polyester/cotton yarn. Since last October, cotton yarn demand has soared, especially the products for home textiles, driving the sales of CVC-type polyester yarn. Some TC-type polyester/cotton yarn mills and pure polyester yarn mills have shifted to produce CVC-type yarns, leading to the reduction of TC-type polyester/cotton yarn and pure polyester yarn supplies. The smooth sales of casual wears boosts blended yarn. The relapse of the pandemic outside China made more people work from home, which promotes the consumption of casual wears such as hoodie, thus blended yarn demand is buoyed.
Discounts of raw materials side
Since free fall in March, direct-spun PSF market has not seen strong demand. The procurement is mostly driven by rigid demand. In addition, with the decline of PSF futures, the trades by basis show advantage, which also did not help to stabilise direct-spun PSF plants. Thus, in the background of strong demand and volatile raw materials at low level, the cash flow of polyester yarn makers has considerably improved in China.