Profitability of the polyester filament yarn (PFY) sector is expected to improve in 2025 as the production capacity of direct-spun PFY will grow by 3.5 per cent to 1.82 million tons.

Additionally, favorable dynamics in polyester raw materials like PX and MEG, along with stable oil prices and limited RMB depreciation will help prevent significant inventory devaluation.

While a potential US-China trade war 2.0 may shift export demand, China’s cost and scale advantage in polyester will cause orders to shift to exports of raw or semi-finished goods, impacting downstream profits but sustaining upstream stability.

In 2024, the profitability of polyester filament yarn remained challenged due an 8.4 per cent rise in production. Higher operating rates, especially during the Spring Festival, added 1.5 million tons, while 2023’s capacity expansion operated at full capacity, contributing over 4 million tons.

Falling oil and polyester raw material prices devalued PFY inventories significantly during the year, slashing prices by 1,400 yuan/mt. Fixed-price policies briefly improved margins but led to higher inventories, exacerbating losses during the price collapse.

However, since mid-December, the polyester filament yarn (PFY) market has been showing a strong performance, with inventory levels dropping to their lowest in 2024. Two key factors have been driving this improvement: better downstream demand in December compared to November and a steep drop in PFY prices, which encouraged bulk purchases by buyers.

With reduced inventories, PFY prices have rebounded by 500–600 yuan/mt, restoring profitability. Margins for conventional products like POY150D/48F have recovered to 200–300 yuan/mt.