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Insight | Time:Nov 21 2016 2:37PM
HC re-PSF price hits the ceiling
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HC re-PSF in recent days goes far better than in August and September.

HC re-PSF in Zhejiang soared 800-1000yuan/mt on the whole since Ningbo Dafa adjusted up the price for four times in mid-October followed by other plants’ price hike. In Guangdong, HC re-PSF also enjoyed price pick-up since September with its after-tax price ever surpassed that of Zhejiang amid tight feedstock supply and bad weather.  

At present, HC re-PSF hits a record high this year, reasons are as follows.

Product inventory is at a low level.

HC re-PSF plant inventory in Zhejiang declined to below 15days from August’ s more than one month with some even short of supply on peak season and amid good downstream restock for Single’s Day and the upcoming Christmas.

Cash flow lacks drive to pick up again with present good improvement

HC re-PSF cash flow in Zhejiang surged to 800yuan/mt from below 500yuan/mt and is now decreasing amid high purchasing price of recycled bottle flake. In Guangdong, a 600yuan/mt cash flow picking up from previous negative one also declines amid slow sales and tight feedstock supply.

Recycle bottle flake price may show steady later after a good increase amid good demand

HC re-PSF recent price hike is more driven by the cost than good demand on peak season as recycled bottle flake price grew faster than HC re-PSF and some suppliers even showed reluctant to sell their sources. Yet another price rise is less likely amid a steady or even declining feedstock price later. (About recycled bottle flake: please refer to the relevant insight )

In a word, HC re-PSF market is at peak with high price, low plant inventory, good sales and positive cash flow. 

Yet a U turn is on the way. HC re-PSF price may show steady or decline in late November or early December amid a stable or decreasing recycled bottle flake price and the waning peak season though it may show strong in the short run.
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