• Key YTD moves: Polyester +23%; HW DWP +38%; China-origin DWP +26%; medium-grade VSF +12% and high-end VSF +15%. In contrast, Lyocell is down 5%.
  • VSF prices in the green again this week: The VSF operating rate was stable at 74%, while VSF inventory days dropped again this week to 24. The VSF/DWP spread improved by 2% w/w but is down 5% YTD. The theoretical VSF loss for Chinese producers narrowed to -RMB 279/t (+24% w/w), despite rises in caustic soda and sulphuric acid. With VSF pre-sales gaining traction and the downstream sector slowly recovering, the VSF price is likely to improve from current levels.   
  • DWP prices remain stable and DWP spread likely to incentivise higher DWP production in China:  Hunan Juntai has switched back to DWP after having planned to produce pulp for one month. Chenming Huanggang is ready to produce DWP and Sun Paper (Zoucheng) is expected to come back from maintenance at the weekend. With the DWP/pulp spread currently at c. USD 325/t, price stability is more than likely.

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