The Chinese polyester market strongly pushed up in July, a typical slack season, which triggered downstream rejection. Meanwhile, scorching weather slowed down momentum. End-user demand seems strong but strength has weakened from July levels. This round of stock build-up by end-users is on the premise of low-pricing plus the spur of possible stricter environmental regulation.

Purchasing strength is restrained, reflecting a downstream cautious mood.

However, environmental protection issue has created a big uncertainty in the market. In the knitting and weaving sector, water jet looms that generate more pollution may get impacted. Shaoxing is a major region but affected looms are limited since the region mainly focuses on circular knitting. As for printing and dyeing, Shaoxing has been rectified intensively during G20 last year, which looks quite effective.

The polyester sales ratio continued to be low in early August, putting producers under stock pressure. Plants then cut price to promote sales, but downstream has not budged. In all, the polyester market in August has revived somewhat from end-July. Initially the market is likely to fluctuate, but environmental regulation as a big uncertainty plus the psychological effect may interact and give the market a chance to rebound around September.