• Key YTD moves: Polyester +16%; HW DWP +45%; China-origin DWP +43%; medium-grade VSF +11% and high-end VSF +13%. In contrast, Lyocell is only up 3%.
  • VSF prices came under further pressure this week (medium-grade down 3.4% and high-grade down 1.5%): The VSF operating rate dropped significantly (-700bps) to 70% on the back of further maintenance. VSF inventory days ticked down to 24 days. The VSF/DWP spread dropped 4% w/w and is now down 9% YTD. The theoretical VSF loss for Chinese producers increased by 23% w/w to -RMB 811/t. Encouragingly, VSF plants have been signing orders “intensively” (CCF) in the past week, which should be supportive of prices.  
  • DWP prices see modest price declines: In the domestic market, Chinese operating rates were lower again as Sun Paper (Yanzhou) converted to paper pulp and Sun Paper (Zoucheng) was shut for one-week maintenance. Despite lower import prices confirmed, imported sales volumes improved this week. Considering new DWP deals concluded, prices are likely to be stable in the ST.    

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