• Key YTD moves: Polyester +16%; HW DWP +51%; China-origin DWP +46%; medium-grade VSF +22% and high-end VSF +39%.
  • Slight drop in VSF prices on the back of small and mid-sized plants cutting prices: The VSF operating rate declined to 81% this week as a Shandong-based VSF line was shut for maintenance. Third week in a row of rising VSF inventory days – now at 16 days. At this level, inventories are still under control. However, VSF prices could come under some pressure, but likely to be short-lived due to a recent rebound in polyester and pulp futures. We note that the VSF/DWP spread is still up 22% YTD.  
  • DWP market was generally stable this past week: VSF producers appeared less willing to entertain price increases due to slower VSF sales. Accordingly, in the domestic market, there is still some DWP availability. Sun Paper maintained stable DWP production, while Hunan Juntai is producing paper pulp. Based on current market dynamics, DWP price stability is likely.

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