• H&M Q1 sales (to 28 Feb) development released this morning: Q1 sales were down 21% y/y (1,300 stores temporarily closed), while sales for 1-13 March (900 stores closed) are up 10% y/y as Germany (H&M’s largest market) and other markets have allowed certain stores to reopen.
  • Key YTD moves: Polyester +26%; HW DWP +44%; China-origin DWP +43%; medium-grade VSF +36% and high-end VSF +39%.
  • VSF market stable: Despite rumours of feedstock shortage, there was no major maintenance announced. VSF operating rate stable at 83% and VSF inventory days remains tight at 12.0 days.  
  • DWP market stable as not much new business done: Sun Paper and Hunan Juntai operations were stable. Other swing mills did not swing to DWP temporarily; however, Hunan Juntai plans to convert to bleached softwood paper pulp periodically. DWP price stability more likely now at current levels. This is the context of tight DWP supply vs. VSF plants communicating plans of lower purchases due to high DWP prices and VSF sales moderating. 

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