• Key YTD moves: Polyester +19%; HW DWP +44%; China-origin DWP +33%; medium-grade VSF +10% and high-end VSF +13%. In contrast, Lyocell is down 2%.
  • Further pressure on VSF pricing as trades remain thin: The VSF operating rate dropped to 67% as Chengdu Grace Fiber was shut. VSF inventory days moved up again to 27.5 days as spinners took slower delivery of goods The VSF/DWP spread weakened by 2% w/w and is down 12% YTD. The theoretical VSF loss for Chinese producers increased to -RMB 798/t. Based on slower downstream consumption, VSF prices are likely to improve only once end-user demand and overseas orders improves.
  • Despite new DWP offers out, trades were thin: On the back of less VSF procurement, Chinese DWP mills operating rates were low, with most opting to produce paper pulp. In terms of supply/demand, softwood remains tight, while hardwood appears to be sufficient.   

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