Take Apr 22 average price as an example, bright PFY price is way higher than semi-dull PFY. In terms of related products, semi-dull chip is cheaper than bright chip, but spread is merely 100yuan/mt, indicating problem lies with PFY itself.
|22-Apr||SD 50/24||Bright 50/36||50D SD-Bright|
|SD 75/36||Bright 75/36||75D SD-Bright|
|SD 150/96||Bright 150D||150D SD-Bright|
|22-Apr||semi-dull chip||Bright chip||SD chips-Bright chip|
Reason held responsible for stronger bright PFY could be found in supply demand structure. According CCFGroup statistics, FDY new capacity launch and old units restart totals over 2.4 million tons in 2017-2018, which is numerous. Structurally looking however, apart from few cationic PFY capacity, remainder are all semi-dull FDY capacity, no single bright FDY unit is launched. In 2019, China FDY capacity expansion is not much, merely 400kt/year, but still no sign of bright FDY. Such big supply gap is the major reason.
In perspective of demand, semi-dull PFY is more like normal spec while bright PFY is more like differentiated product. When industry starts to prosper, normal products profit rallies and demand is larger, hence factories intend to expand its capacity. Later, with supply pressure emerging, normal products’ cash flow squeezes, this is also when the industry enters downturn. Semi-dull FDY just experienced the described rise and fall cycle since end 2016. Hence, semi-dull and bright PFY price difference could partly reflect the industry cycle.