• Key YTD moves: Polyester +15%; HW DWP +51%; China-origin DWP +43%; medium-grade VSF +20% and high-end VSF +25%. In contrast, Lyocell is only up 4%.
  • Slight pressure on medium-grade VSF, while high-end drops 5% w/w: This brings the high/medium spread in line with the historical average. The VSF operating rate dipped to 76% as Shandong-based units were running less but has recovered to 79%. Encouragingly, VSF inventory days declined to 22.5 days as spinners were replenishing stocks. The VSF/DWP spread dropped 2% w/w (+1% YTD). The theoretical VSF profit for Chinese producers dropped to RMB 182/t this week, down 63% w/w. This is on the back of higher coal and chemical costs.   
  • DWP prices remain stable, with limited activity: In the Chinese market, Shandong operating rate dropped slightly but production remains generally high. Most domestic offers have been around RMB 8,700/t. New offers are likely to come out soon, but prices are likely to remain stable in light of softer VSF prices.

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