• VSF operating rate drops to 77%: This was on the back of plants in East China cutting rates. Despite this, VSF inventory days dropped to 13, supported by healthy trading for downstream plant demand.
  • VSF profits in the green: With higher VSF prices, the theoretical VSF margin for medium grades moved into positive territory (> CNY700/t).
  • China domestic dissolving pulp market kept firm: This was buoyed by planned maintenance from Sun Paper and Hunan Juntai. Additionally, some VSF producers increased procurement of domestic DWP due to delays of imported DWP.
  • No new offers for hardwood DWP pulp: However, some suppliers could announce new offers in early January, which might see DWP breach USD 750/t. Softwood DWP suppliers kept offers at USD 800-815/mt. Supply side starting to bounce back, with Cosmo expected to resume operations in February.

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